OPINION:
Antitrust case reasoning is too often in the eye of the regulator. Sometimes that eye is jaundiced, distorting what should be a straightforward portrait of companies making strategic business moves. In the case of the Biden Justice Department, the eye was covered in the sickly green film of environmental extremism, skewing its perception of several unobjectionable deals. Worse, it blotted out good reasons for favoring those deals.
The Biden administration’s main targets were the mergers between Chesapeake Energy and Southwest Energy, Chevron and Hess, Exxon Mobil and Pioneer Natural Resources, and Occidental and CrownRock. These are all fossil fuel companies whose mergers, according to the Biden Justice Department, would lower competition and hurt energy consumers (a bitter irony considering what the administration’s reckless drive toward “renewable energy” was already costing consumers).
The truth was that each deal would lower prices and create efficiencies that would strengthen the U.S. energy sector. As a matter of national security, they were no-brainers: steps toward energy independence, which is a full-stop global strategic advantage. However, a healthy oil and gas industry would be harder to run into the ground and replace with less efficient, less cost-effective wind and solar, and in the Biden era, that eclipsed all other considerations. In the end, all those mergers went through, though many productive months and billions of dollars were lost in the government’s delays.
Under President Trump, the green scales have fallen from the Justice Department’s eyes, and it has approached mergers and acquisitions very differently, especially where national security comes into play. For example, the Justice Department recently moved to settle its case against the HPE and Juniper merger, two enterprise wireless systems companies unrelated to energy that career Justice Department officials nonetheless opposed. Although the Trump administration’s settlement doesn’t make everyone happy, officials clearly listened to the national security arguments outlined by the U.S. intelligence community.
Former disgruntled Justice Department official Roger Alford joined a chorus criticizing the move in an address to the Technology Policy Institute on Aug. 18, saying he “hope[s] the federal court overseeing the Justice Department’s proposed resolution blocks the HPE/Juniper merger,” which Mr. Alford believes was spurred by inappropriate influence from lobbyists. What was truly inappropriate was Mr. Alford’s sharing that opinion.
My organization, Center to Advance Security in America, has filed a complaint in the disciplinary counsel’s office of the D.C. Bar’s board on professional responsibility regarding Mr. Alford’s betrayal of client confidences and false allegation that lobbyists are improperly influencing Trump Justice Department antitrust enforcement decisions.
However, the Justice Department’s settlement wasn’t the result of having lobbyists in its ear or, as with the Biden Justice Department, placating radical environmental groups. What’s most heartening is that it resulted from listening to the U.S. intelligence community.
Enterprise networking products like those produced by HPE and Juniper form the backbone of vital international communications and information infrastructure, including cloud computing and government networks. For all our innovative power, the No. 1 American player in the global enterprise networking market holds just 6% of market share. Juniper has 2%, and HPE does not even register a notable share.
Meanwhile, Huawei, the Chinese telecommunications giant, controls roughly 30% of the global telecom market, an acute national security threat to the United States and its allies. Huawei was started by a former People’s Liberation Army officer and has been accused of massive intellectual property theft, hacking Australian telecom systems, complicity in the Chinese government’s oppression of ethnic and religious minorities, and violating sanctions on Iran. There is little daylight between the company and the Chinese Communist Party. Ceding global market share to such an organization is too great a long-term risk. U.S. companies need scale to compete effectively with Huawei and other international rivals.
That’s why the U.S. intelligence community urged the Justice Department to support the HPE-Juniper merger.
National security considerations should be central to antitrust decision-making, particularly in high-tech sectors. If American businesses stay fragmented, they will neither create nor use next-generation networking technologies in large volumes, making domestic markets more import-intensive, including from adversaries like China.
Global interconnectivity marches on, and global markets continue to increase. These phenomena haven’t erased the need for national vigilance. To the contrary, the thousands of technological points of contact among systems, companies and nations have opened thousands of new points of vulnerability. Allowing American businesses to grow, innovate and compete against foreign entities is strategically wise.
On the other hand, hobbling the U.S. energy independence while chasing fashionable but currently impracticable, and arguably unnecessary, renewable supplies is shortsighted. Or maybe “green-sighted.”
• James Fitzpatrick is the director of the Center to Advance Security in America, an official in the Trump 45 administration and a U.S. Army veteran.
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