Office of the
Illinois Attorney General
Kwame Raoul

Chicago – Attorney General Kwame Raoul joined a group of attorneys general in opposing the Justice Department’s proposed settlement in the $14 billion merger between Hewlett Packard Enterprise (HPE) and Juniper Networks. The coalition of attorneys general also urged the judge overseeing the case to hold a hearing to determine whether the merger of these information technology companies is in the public interest and whether it was obtained through the influence peddling that federal law intends to prevent.

“This merger has the potential to drastically limit competition and substantially increases prices for consumers,” Raoul said. “I join my colleagues in asking that the court put the public’s interests first and examine the process that led to this merger to ensure that it was not the product of influence peddling and backroom dealmaking.”

The Tunney Act is a post-Watergate law enacted by Congress in 1974 to ensure that antitrust settlements reached by the Justice Department are based on the merits rather than undue influence by powerful corporations and their well-connected lobbyists. Under the law, the Justice Department must seek approval of all antitrust settlements from the courts, and the courts must make independent judgments that a settlement is in the public interest. The attorneys general, who enforce state and federal antitrust laws, argue that publicly available information about the process that led to the HPE/Juniper settlement suggests that the Justice Department has failed to meet that standard in this case. 

In their letter to the Justice Department, Raoul and the state attorneys general take issue with the department’s approval of the merger and say that the court should “examine the process that led to the Proposed Final Judgment in this case to uncover whether it has been terminally infected by precisely the type of backroom dealing the Tunney Act was intended to prevent.”

According to public reports, the Justice Department’s trial staff working on the merger case, as well as senior leadership in the Antitrust Division, opposed the HPE settlement. But higher-level political appointees at the department were lobbied by individuals with close ties to the Trump administration. The chief of staff to the U.S. attorney general then allegedly pushed the settlement through over the objections of the Antitrust Division and in a manner that did not address the anticompetitive harms alleged in the government’s complaint. For example, the settlement merely requires HPE to divest a small business line that is largely irrelevant to the litigation. The merger will result in two firms, HPE and Cisco, controlling over 75% of the relevant market and may increase prices by up to 14%, according to the Justice Department’s own court papers. 

Two senior Antitrust Division attorneys appointed by President Trump’s own administration were fired for opposing the settlement. One of the fired attorneys has spoken out publicly against the settlement and called it a “scandal” that represented the “Rule of Lobbyists” over the “Rule of Law.”

The coalition of attorneys general are pressing the court to hold an evidentiary hearing and require discovery into the settlement and the allegedly corrupt process that led to it. They are also calling on the court to reject the settlement as being against the public interest if the evidence establishes that it was the product of undue influence.

Attorney General Raoul was joined in sending the letter by the attorneys general of Arizona, California, Colorado, Connecticut, Hawaii, Maine, Maryland, Massachusetts, Michigan, Nevada, New Mexico, New York, North Carolina, Oregon, Rhode Island, Washington and Wisconsin.