Trump’s Antitrust Message Takes Shape
The clarity of President Trump’s antitrust message for a potential second term is still in question. Small businesses, workers’ families, and large corporate monopolies that claim to prioritize American interests risk losing their place in a free economy.
This message emerged during recent developments, not via a new initiative, but rather through the dismissal of ongoing lawsuits from the Biden administration that could have disrupted Trump’s antitrust strategy.
The Trump administration made a decisive statement: America’s antitrust vision supports free markets and robust competition over procedural formalities.
On Friday, the Trump Department of Justice moved to reject government efforts to prevent the merger between Hewlett Packard Enterprise and Juniper Networks. The lawsuit, initiated during Biden’s final days in office, raised issues extending beyond narrow legal arguments.
If brought to trial, this case likely would have failed—not due to the insignificance of antitrust efforts, but because of the questionable foundation on which it stood. Its shaky legal basis could have weakened the Justice Department’s credibility at a crucial moment when Trump’s new antitrust team was taking shape.
Having served as a former state attorney general, I understand the significance of strong antitrust enforcement. However, pursuing weak cases could be more damaging than beneficial. It risks undermining judicial support and squandering political capital for more critical future endeavors.
Moreover, the lawsuit was strategically unwise. At the Department of Homeland Security, I faced threats from Huawei, a telecommunications behemoth under Chinese state control. Huawei has close connections to the Chinese military, and the aim was to infiltrate U.S. companies and global infrastructure. This is why the U.S. banned the company, and allies followed suit.
The merger between HPE and Juniper would bolster America’s competitive standing against Huawei’s dominance. Rejecting it would weaken two American firms vying for a foothold in international markets, inadvertently benefiting competitors like Huawei and Cisco.
Even when viewed through a narrow lens of U.S. antitrust law, the situation is disconcerting. The newly merged entity would still lag behind Cisco in key sectors like wireless local area networks, holding less than 25% of the domestic market share. Analysts found no solid evidence indicating future price increases or reduced innovation, suggesting that mergers could, in fact, stimulate competition against Cisco, which continues to hold a dominant position.
In contrast, the European Union—which isn’t known for its leniency regarding corporate mergers—approved the transaction. EU regulators determined that it posed no anti-competitive threats to competitors, distributors, or consumers. Even with the merger, Cisco remains significantly larger than the new entity, and seven other competitors continue to operate in the market, which shows that barriers to entry remain low.
Despite Cisco’s struggles, its market power highlights the advantages of broader integration, which should not solely hinge on consumer preferences. It’s worth noting that WLAN sales account for only one-sixth of the combined company’s total revenue.
Antitrust considerations should focus not only on company size but also on the overall competitiveness of the industry. As FTC commissioner Mark Medor indicated in a recent paper, “Antitrust policy for conservatives,” the key question remains whether other companies can compete effectively. Market analysts are in agreement that this merger would promote, rather than deter, competition and innovation.
The Department of Justice should have refrained from pursuing this case. It’s likely to reflect poorly on the Biden administration, especially with Trump resuming leadership.
If the lawsuit had progressed, it could have undermined the credibility of U.S. antitrust laws, limited responses to foreign adversaries like China, and hindered future enforcement actions. According to Section 7 of the Clayton Act, mergers that “tend to reduce competition or create monopolies” should not be allowed. Judges need to remain wary of weak cases.
Consumer welfare standards are crucial, and these metrics usually facilitate the approval of mergers. European regulators found no consumer concerns regarding prices or choices about the merger. The Biden Justice Department’s complaint contradicts the very principles that inform Trump’s antitrust revival.
Withdrawing these cases is both a sound policy and a sensible political move. The Trump administration avoided unnecessary legal pitfalls, prioritized national security, and delivered a distinct message: America’s antitrust vision favors free markets and vigorous competition over bureaucratic formalities.
Applause is due for Trump’s Department of Justice for making this prudent decision.
