90 FR 112 pgs. 24870-24950 - United States v. Keysight Technologies Inc., et al.; Proposed Final Judgment and Competitive Impact Statement
Type: NOTICEVolume: 90Number: 112Pages: 24870 - 24950
Pages: 24870, 24871, 24872, 24873, 24874, 24875, 24876, 24877, 24878, 24879, 24880, 24881, 24882, 24883, 24884, 24885, 24886, 24887, 24888, 24889, 24890, 24891, 24892, 24893, 24894, 24895, 24896, 24897, 24898, 24899, 24900, 24901, 24902, 24903, 24904, 24905, 24906, 24907, 24908, 24909, 24910, 24911, 24912, 24913, 24914, 24915, 24916, 24917, 24918, 24919, 24920, 24921, 24922, 24923, 24924, 24925, 24926, 24927, 24928, 24929, 24930, 24931, 24932, 24933, 24934, 24935, 24936, 24937, 24938, 24939, 24940, 24941, 24942, 24943, 24944, 24945, 24946, 24947, 24948, 24949, 24950FR document: [FR Doc. 2025-10536 Filed 6-11-25; 8:45 am]
Agency: Justice Department
Sub Agency: Antitrust Division
Official PDF Version: PDF Version
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DEPARTMENT OF JUSTICE
Antitrust Division
United States v. Keysight Technologies Inc., et al.; Proposed Final Judgment and Competitive Impact Statement
Notice is hereby given pursuant to the Antitrust Procedures and Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment, Stipulation, and Competitive Impact Statement have been filed with the United States District Court for the District of Columbia in United States of America v. Keysight Technologies, Inc., et al., Civil Action No. 1:25-cv-01734-CJN. On June 2, 2025 the United States filed a Complaint alleging that Keysight's proposed acquisition of Spirent Communications plc would violate Section 7 of the Clayton Act, 15 U.S.C. 18. The proposed Final Judgment, filed at the same time as the Complaint, requires Keysight and Spirent to: divest to Viavi Solutions, Inc. property and assets related to or used in connection with three of Spirent's communications testing and measurement business lines (high-speed ethernet, network security and channel emulation); provide to Viavi the opportunity to employ relevant personnel of the businesses being divested; and obtain various transitional services from Keysight and Spirent to support the divested businesses for limited periods.
Copies of the Complaint, proposed Final Judgment, and Competitive Impact Statement are available for inspection on the Antitrust Division's website at http://www.justice.gov/atr and at the Office of the Clerk of the United States District Court for the District of Columbia. Copies of these materials may be obtained from the Antitrust Division upon request and payment of the copying fee set by Department of Justice regulations.
Public comment is invited within 60 days of the date of this notice. Such comments, including the name of the submitter, and responses thereto, will be posted on the Antitrust Division's website, filed with the Court, and, under certain circumstances, published in the Federal Register . Comments should be submitted in English and directed to Jared Hughes, Assistant Chief, Media, Entertainment and Communications Section, Antitrust Division, Department of Justice, 450 Fifth Street NW, Suite 7000, Washington, DC 20530 (email address: ATR.MEC.Information@usdoj.gov ).
Suzanne Morris,
Deputy Director of Civil Enforcement Operations, Antitrust Division.
United States District Court for the District of Columbia
United States of America, 450 Fifth Street NW, Washington, DC 20530, Plaintiff, v. Keysight Technologies, Inc., 1400 Fountaingrove Parkway, Santa Rosa, CA 95403; and Spirent Communications PLC, 180 High Street, Crawley, West Sussex RH10 1BD, United Kingdom, Defendants.
Civil Action No. 1:25-cv-01734-CJN
Judge: Carl J. Nichols
Complaint
Keysight Technologies, Inc. ("Keysight") and Spirent Communications plc ("Spirent") are two of the largest global providers of three key types of communications testing and measurement equipment-high speed ethernet testing, network security testing, and radio frequency ("RF") channel emulators-and are significant direct competitors in the United States. Keysight's proposed acquisition of Spirent threatens to substantially lessen competition and harm customers in violation of Section 7 of the Clayton Act, 15 U.S.C. 18. It should be enjoined to avoid harm to competition.
I. Nature of the Action
1. Communications networks connect the world, moving significant volumes of data around the clock. Keysight and Spirent provide critical, highly-specialized equipment used to test various components of communications networks and measure and validate network performance. Network equipment manufacturers, communications network operators, and large cloud computing providers purchase and use this specialized testing equipment to ensure their products and networks operate effectively and securely under normal conditions, and to prepare them to withstand the real-world strain of interruptions, cyberattacks, interference, and high user demand. Because communications technologies are rapidly evolving, the communications industry invests millions of dollars annually in researching, developing, and implementing upgrades to their products to keep pace with technological advancement.
2. Together, Keysight and Spirent dominate three testing and measurement markets in the United States: high-speed ethernet testing, network security testing, and RF channel emulators. Keysight and Spirent are each other's closest competitors in these markets. For years, competition between them has resulted in each company offering discounts, maintaining valuable aftermarket support services, and investing in new and advanced products and features-all to the benefit of their customers and the broader public. Keysight's proposed acquisition of Spirent would eliminate this competition, leading to higher prices; lower quality products, support, and service; and less innovation.
II. Defendants and the Proposed Transaction
3. Keysight is a Delaware corporation with its headquarters in Santa Rosa, California. It reported $4.979 billion in global revenues in 2024, $1.769 billion of which were from the United States. Keysight's Communications Solutions Group produces and sells the products in the relevant markets at issue. The Communications Solutions Group includes two main areas: (i) commercial communications and (ii) aerospace, defense and government.
4. Spirent is a United Kingdom corporation headquartered in Crawley, England, with offices in Calabasas, California and other locations in and outside the United States. It earned $460 million in global revenues in 2024, $257 million of which were from the United States.
5. On March 28, 2024, Keysight offered to purchase Spirent for $1.5 billion. Spirent's board recommended that Spirent shareholders accept Keysight's offer, which they did on May 22, 2024.
III. Jurisdiction and Venue
6. The United States brings this action pursuant to Section 15 of the Clayton Act, as amended, 15 U.S.C. 25, to prevent and restrain Keysight and Spirent from violating Section 7 of the Clayton Act, 15 U.S.C. 18.
7. Both Keysight and Spirent are corporations that transact business within this District through, among other things, their sales of communications testing and measurement products.
8. Defendants Keysight and Spirent are engaged in a regular, continuous, and substantial flow of interstate commerce and their sales have a substantial effect on interstate commerce, including within this District. The Court has subject-matter jurisdiction pursuant to Section 15 of the Clayton Act, as amended, 15 U.S.C. 25, and 28 U.S.C. 1331, 1337(a), and 1345.
[top] 9. Defendants Keysight and Spirent have consented to venue and personal
IV. Background
10. Communications networks link together different entities and devices, referred to as "endpoints," to enable the exchange of information between them. Communications networks include computer networks in a large enterprise organization; telecommunications networks that power mobile phones; satellite networks that enable GPS-enabled devices; and cloud-computing networks that store and transmit vast quantities of data. These endpoints can be connected via hardwire ( e.g., optical fiber/copper) or wirelessly using radio spectrum. Today, a complex system of interconnected and separate networks allow consumers to store, access, and move data across the world.
11. The communications industry uses specialized testing equipment to verify the performance of communications networks and the devices connected to them. This testing is essential to validate that a network performs as expected, even under non-ideal conditions, such as conditions that interfere with a wireless signal, or to ensure that networks and equipment can handle increasing loads of traffic. Testing also helps ensure that user data is securely protected against the threat of cyberattack. To complete this testing, equipment manufacturers and network operators purchase specialized hardware and software equipment, and they rely on periodic software updates and multi-year services contracts to provide regular maintenance and system upgrades.
12. High-speed ethernet testing, network security testing, and RF channel emulators are used in a lab environment to test network elements before they are deployed in the field. Lab testing equipment is complex, costly, and relatively fixed. By contrast, equipment used to test networks and devices already in operation-known as live testing equipment-is generally more portable and less expensive than lab testing equipment.
13. Customers use lab testing equipment throughout the lifecycle of a network, even after the network or devices in it have been deployed. Lab testing ensures that communications networks can support updated devices, comply with revised industry standards, and maintain data security as the cybersecurity landscape changes.
14. Lab testing equipment requires constant engineering investment. Network technology changes rapidly: data moves faster, mobile wireless providers deploy new spectrum and new wireless technologies, would-be hackers develop new lines of attack, and device manufacturers make each iteration of their product more sophisticated. Lab testing equipment providers, including Keysight and Spirent, spend millions of dollars each year on research and development to ensure their products keep pace with market changes and employ hundreds of specialized experts dedicated to improving their testing equipment and responding to customer requests.
15. Accurate lab testing capabilities are critical to the development, validation, and maintenance of wireline and wireless communications devices and networks. A wide range of customers depend on specialized lab testing equipment to successfully deploy their networks and devices, including network equipment manufacturers, network operators, chipset manufacturers, "hyperscalers" that offer cloud computing services, research labs, government testing centers, and large companies operating secure internal networks. Equipment cannot be effectively deployed in these complex networks without such testing.
V. Relevant Markets
16. Each of the three product markets identified below constitutes a line of commerce as that term is used in Section 7 of the Clayton Act, 15 U.S.C. 18, and each is a relevant product market in which competitive effects can be assessed. The geographic market for each relevant product market is comprised of sales to customers within the United States.
A. High-Speed Ethernet Testing Equipment
17. High-speed ethernet testing equipment tests the performance of both the hardware and software components of high-speed wireline communications networks. Specifically, it tests the functionality of communications both within a given network and across different networks. This testing ensures that wireline networks can support high-bandwidth use cases, such as running artificial intelligence algorithms. These testing products are crucial to ensure that large network operators can support data usage at scale.
18. Customers using high-speed ethernet testing equipment have no reasonable alternatives for testing their wireline network equipment. Solutions developed in-house or relying on open-source software would not provide an adequate alternative for most customers. Attempting to use such options would require costly investments in engineering and other technical resources, can take years to develop, and would not be as reliable or robust as the high-speed ethernet testing equipment available from Keysight or Spirent.
19. A hypothetical monopolist could profitably impose a small but significant and non-transitory price increase for, or otherwise degrade quality of, high-speed ethernet testing equipment customers in the United States. A degradation of quality could entail any dimension of competition, including service, capacity investment, choice of product variety or features, or innovation. Accordingly, high-speed ethernet testing equipment sold to U.S. customers constitutes a relevant market and line of commerce under Section 7 of the Clayton Act, 15 U.S.C. 18.
B. Network Security Testing Equipment
20. Network security testing equipment assesses the cybersecurity of wireline networks through laboratory simulation of attacks, testing firewalls as well as other security-related features like proxy and secure content gateways. These products simulate real-world conditions, such as high traffic volumes, to ensure that a network's security policies protect it from attack without impacting performance.
21. Customers that purchase network security testing equipment have no reasonable alternatives. Although some companies make use of open-source software or internally developed tools for limited purposes, self-supply is not a viable option for most customers due to the high costs involved. Customers rely on network security testing equipment to ensure sensitive data are protected from cyberattacks, and they are thus unlikely to rely on unproven and untested solutions in the ordinary course of business.
22. A hypothetical monopolist could profitably impose a small but significant and non-transitory price increase for, or otherwise degrade the quality of, network security testing equipment offered to customers in the United States. A quality degradation could entail any dimension of competition, including service, capacity investment, choice of product variety or features, or innovation. Accordingly, network security testing equipment sold to U.S. customers constitutes a relevant market and line of commerce under Section 7 of the Clayton Act, 15 U.S.C. 18.
C. RF Channel Emulators
[top] 23. RF channel emulators evaluate how wireless networks and devices will
24. RF channel emulators, also known as "faders," are used in a lab setting. They test whether wireless receivers, such as cell phones or radar handsets, can effectively receive and decode RF signals. A channel emulator adds various impairments to the intended communication path to simulate real-world challenges, such as dense urban settings, mountainous regions, or long distances. This performance testing enables engineers to adjust and optimize designs in a controlled environment to ensure wireless networks perform as expected once they are deployed.
25. Customers that purchase RF channel emulators have no reasonable alternatives. Although some companies make use of open-source software or internally developed tools for limited purposes, self-supply is not a viable option for most customers due to the high costs and technical expertise required to develop internal solutions. Customers rely on RF channel emulators to ensure networks will operate effectively in real-world conditions.
26. A hypothetical monopolist could profitably impose a small but significant and non-transitory price increase for, or otherwise degrade the quality of, RF channel emulators sold to customers in the United States. A degradation of quality could entail any dimension of competition, including quality, service, capacity investment, choice of product variety or features, or innovation. Accordingly, RF channel emulators sold to U.S. customers constitutes a relevant market and line of commerce under Section 7 of the Clayton Act, 15 U.S.C. 18.
VI. Anticompetitive Effects
27. Keysight and Spirent are the dominant providers of high-speed ethernet testing equipment, network security testing equipment, and RF channel emulators in the United States. Their proposed merger would extinguish the competition between them and would presumptively result in a substantial lessening of competition in each market.
28. The transaction would substantially lessen competition in the market for high-speed ethernet testing equipment in the United States. Keysight and Spirent are the two principal suppliers of high-speed ethernet testing equipment in the United States and have remained the market leaders in this area for many years. In the United States, Keysight and Spirent have a combined market share of approximately 85%. The market for high-speed ethernet testing equipment is already highly concentrated and would become significantly more concentrated as a result of the proposed merger.
29. Keysight and Spirent compete directly against one another to provide high-speed ethernet testing equipment to customers. The handful of other market participants serve far fewer customers and offer much less robust technical solutions than Defendants do. Customers have benefited from competition between Defendants through lower prices, higher quality services, and more robust innovation-an essential feature as technology and network hardware testing components continuously evolve to meet and enable customer innovations.
30. The transaction also would substantially lessen competition in the market for network security testing equipment in the United States. Keysight and Spirent are the two largest suppliers of network security testing equipment in the United States and have remained the market leaders in this market for many years. In this market, each Defendant earns more than double the revenue of any other competitor; together, Keysight and Spirent would have a combined market share of at least 60% in the United States. The market for network security testing equipment is already highly concentrated and would become significantly more concentrated after the proposed merger.
31. Keysight and Spirent compete head-to-head to provide network security testing equipment to customers. This competition has resulted in lower prices, higher-quality services, and faster product improvements. These updates are essential to keep pace as cybersecurity attackers develop increasingly more sophisticated methods of accessing secure networks.
32. The transaction also would substantially lessen competition in the market for RF channel emulators in the United States. Keysight and Spirent are two of the leading providers of RF channel emulators in the United States, with a combined market share of more than 50%. The market for RF channel emulators is already highly concentrated and would become significantly more concentrated after the proposed merger.
33. Keysight and Spirent compete head-to-head to provide RF channel emulators to customers. This competition has resulted in lower prices, higher-quality services, and robust product improvements. These updates are essential to keep pace as technology improves and wireless networks are used for increasingly more data traffic.
34. Keysight and Spirent are especially close competitors for customers who use RF channel emulators to test terrestrial wireless networks (as opposed to satellite networks) and for customers who need "external" hardware-based faders able to test a full array of RF channel emulation capabilities. Other providers of RF channel emulators only support satellite networks and/or only emulate simple interference with "internal" software-based products. Keysight and Spirent are the only providers in the United States of RF channel emulators capable of supporting the full array of test environments for terrestrial wireless networks. For U.S. customers that require these capabilities, Keysight and Spirent are the only options.
VII. Absence of Countervailing Factors
35. It is unlikely that any firm would enter the relevant markets in a timely manner sufficient to prevent the proposed transaction's anticompetitive effects. Successful entry into these specialized markets is difficult, time-consuming, and costly.
[top] 36. A prospective entrant would need to invest significant time and capital to design and develop testing products comparable to the Defendants' product lines. In each of the relevant markets, Keysight and Spirent have spent millions of dollars and many years acquiring, building, and refining their products. Moreover, the underlying communications technologies are governed by evolving standards, requiring substantial ongoing investment to ensure that a new product functions effectively with new features and meets new standards. Finally, given that these products impact the performance, security, and reliability of networks that handle sensitive data, a prospective entrant would need to devote significant resources to demonstrate its ability to provide a high-quality product and high-quality service and support, including regular updates. Purchasers of high-speed ethernet lab testing equipment, network security testing equipment, and RF
37. Defendants cannot demonstrate verifiable, merger-specific efficiencies sufficient to offset the proposed merger's anticompetitive effects.
VIII. Violations Alleged
38. Keysight's proposed acquisition of Spirent will eliminate competition between them and would substantially lessen competition in three critical communications testing and measurement equipment markets in the United States in violation of Section 7 of the Clayton Act, 15 U.S.C. 18.
39. Among other things, the transaction would:
i. eliminate competition between Keysight and Spirent;
ii. likely cause prices of critical communications testing and measurement equipment to be higher than they would be otherwise; and
iii. likely reduce quality, service, choice, and innovation.
IX. Request for Relief
40. The United States requests:
i. that Keysight's proposed acquisition of Spirent be adjudged to violate Section 7 of the Clayton Act, 15 U.S.C. 18;
ii. that the Defendants be permanently enjoined and restrained from carrying out the proposed acquisition of Spirent by Keysight or any other transaction that would combine the two companies;
iii. that the United States be awarded costs of this action; and
iv. that the United States be awarded such other relief as the Court may deem just and proper.
Dated: June 2, 2025.
Respectfully submitted,
For Plaintiff United States of America:
Abigail A. Slater (D.C. Bar #90027189), Assistant Attorney General.
Roger P. Alford (D.C. Bar #445158), Principal Deputy Assistant Attorney General.
William J. Rinner (D.C. Bar #997485), Deputy Assistant Attorney General.
Ryan Danks , Director of Civil Enforcement.
George C. Nierlich (D.C. Bar #1004528), Deputy Director of Civil Enforcement.
Jared A. Hughes, Cory Brader Leuchten, Assistant Chiefs, Media, Entertainment, and Communications Section.
Carl Willner* (D.C. Bar #412841), Carmel Arikat (D.C. Bar #1018208), Katherine Clemons (D.C. Bar #1014137), Curtis Strong (D.C. Bar #1005093), Isabel Agnew, Attorneys.
U.S. Department of Justice, Antitrust Division, Media, Entertainment, and Communications Section, 450 Fifth Street NW, Suite 7000, Washington, DC 20530, Tel.: 202-514-5813, Fax: 202-514-6381, Email: carl.willner@usdoj.gov.
*?Lead Attorney to be Noticed.
United States District Court for the District of Columbia
United States of America, Plaintiff, v. Keysight Technologies, Inc. and Spirent Communications PLC, Defendants.
Civil Action No. 1:25-cv-01734-CJN
Judge: Carl J. Nichols
[Proposed] Final Judgment
Whereas, Plaintiff, United States of America, filed its Complaint against Keysight Technologies, Inc. ("Keysight") and Spirent Communications plc ("Spirent") (together "Defendants") on June 2, 2025;
And whereas, the United States and Defendants have consented to entry of this Final Judgment without the taking of testimony, without trial or adjudication of any issue of fact or law, and without this Final Judgment constituting any evidence against or admission by any party relating to any issue of fact or law;
And whereas, Defendants agree to make a divestiture and to undertake certain actions related to the divestiture to remedy the loss of competition alleged in the Complaint;
And whereas, Defendants represent that the divestiture and other relief required by this Final Judgment can and will be made and that Defendants will not later raise a claim of hardship or difficulty as grounds for asking the Court to modify any provision of this Final Judgment;
Now Therefore, it is Ordered, Adjudged, and Decreed:
I. Jurisdiction
The Court has jurisdiction over the subject matter of and each of the parties to this action. The Complaint states a claim upon which relief may be granted against Defendants under Section 7 of the Clayton Act (15 U.S.C. 18).
II. Definitions
As used in this Final Judgment:
A. "Acquirer" means Viavi or another entity approved by the United States in its sole discretion to which Defendants divest the Divestiture Assets.
B. "Divestiture Assets" means all of Defendants' rights, titles, and interests in and to all property and assets, tangible and intangible, wherever located, relating to or used in connection with the Divestiture Business, including the following:
1. the real property leasehold interests and associated renewal rights in the facilities located at (a) 27349 Agoura Road, Calabasas, California 91301 (United States); (b) 47-53 Lascar Catargiu Blvd., 1st District, Bucharest (Romania); (c) Pacific Guardian Center-Mauka Tower, 737 Bishop Street, Suite 1900, Honolulu, Hawaii 96813 (United States); (d) Unit 1301, 1302, 1303, 1305, 1306, 1307, 1309, 13th Floor, Shining Building, No. 35 Xueyuan Road, Haidian District, Beijing (China); (e) Unit B4-09, 4th Underground Floor, Shining Building, No. 35 Xueyuan Road, Haidian District, Beijing (China); and (f) 2nd Floor, Quadrant 2 of Tower 1, Umiya Business Bay, Sarjapur Outer Ring Road, Bangalore East Taluk 560 103 (India);
2. all inventory (whether raw materials, work in process, semifinished goods, finished goods, packaging, labels, scrap or supplies);
3. all furniture, fixtures, furnishings, vehicles, equipment, machines, computers, tools, spare parts and tooling, office and other supplies, technical documentation, and other tangible personal property (including third party software embedded therein) including as set forth on Annex 1, Schedule II.B.3 hereto;
4. all contracts, including all development contracts with XRComm and VVDN Technologies for Spirent's channel emulation business, contractual rights, and customer relationships, including Spirent's relationship with Calnex as a reseller and all other agreements, commitments and purchase orders, including those related to intellectual property, suppliers, or customers, and all outstanding offers or solicitations to enter into a similar arrangement; provided, however, that for any contracts that relate to both the Divestiture Business and to businesses not included in the Divestiture Assets, only the portion of the contract related to the Divestiture Business is a Divestiture Asset; provided, further, that none of the following contracts form part of the Divestiture Assets: (i) insurance contracts and policies, (ii) real property lease contracts with respect to real property not listed in Paragraph II.B.1 of this definition and (iii) any contract set forth on Annex 2, Schedule II.B.4.
5. all licenses, permits, certifications, approvals, consents, registrations, waivers, and authorizations, including all pending applications or renewals of the same;
6. data and information (including technical information) held or controlled by Defendants;
[top] 7. all books and records, including (i) customer and supplier lists, accounts, sales, and credits records; (ii) budgets, pricing guidelines, ledgers, journals, deeds, title policies, minute books, and
8. copies of all tax returns related to taxes on or with respect to the Divestiture Business or the Divestiture Assets;
9. all intellectual property owned, licensed, or sublicensed, either as licensor or licensee, including (a) patents, patent applications, and inventions and discoveries that may be patentable, (b) registered and unregistered copyrights and copyright applications, (c) registered and unregistered trademarks, trade dress, service marks, trade names, and trademark applications (including commercial names and d/b/a names), and (d) rights in internet websites and internet domain names, in each case, set forth on Annex 3, Schedule II.B.9 hereto; provided, however, that trademarks, service marks, trade names, internet domain names, logos, slogans, trade dress, and other similar designations of source or origin of the Defendants (including the goodwill symbolized thereby) containing the following marks do not form part of the Divestiture Assets: "Spirent", "Spirent Communications" and the Spirent circle device;
10. tangible and electronic embodiments of know-how, documentation of ideas, research and development files, laboratory notebooks and other similar tangible or electronic materials (including trade secrets, design protocols, specifications for materials, specifications for parts, specifications for devices, design tools and simulation capabilities), or proprietary software;
11. all rights to causes of action, lawsuits, judgments, claims, defenses, indemnities, guarantees, refunds, rights of recovery, rights of set off and other rights and privileges against third parties and demands of any nature, except for claims for refunds of any taxes;
12. all goodwill in respect of, or arising primarily out of, the conduct of the Divestiture Business (including the exclusive right for Acquirer to represent itself as carrying on the operation of the Divestiture Business in succession of Spirent);
13. all guaranties, warranties, indemnities and similar rights granted by any third party relating to the Divestiture Business or a Divestiture Asset to the extent required to be performed during the period on and after the Divestiture Date; and
14. originals of all personnel records relating to Relevant Personnel.
Provided, however, that except as otherwise specifically addressed in this Paragraph II.B (including the assets listed in Paragraph II.B.1 and the Schedules in Paragraph II.B), for any property or assets that relate to, are used in the operation of, or contain information for, both the Divestiture Business and Defendants' other businesses ("Shared Assets"), only the portion of such property or assets related to or necessary for the operation of the Divestiture Business constitutes Divestiture Assets. The United States, in its sole discretion, will determine whether Shared Assets are necessary for the operation of the Divestiture Business.
C. "Divestiture Business" means the high-speed ethernet, network security, and channel emulation business lines of Spirent, Spirent TestCenter, and the following product lines and projects, each including the products listed in Annex 4, Schedule II.C:
1. network infrastructure testing applications offering network access/switching/routing/SDN protocol coverage, cloud and data-center infrastructure test (including compute, storage, network) and service provider scale test; automotive V2X test and in-vehicle networking test;
2. application and security testing solutions providing network application performance and security attacks at performance load for testing converged multi-play services, application delivery and network security controls, including the Avalanche and Cyberflood branded product lines; and
3. Spirent's channel emulation business, including the Vertex branded channel emulation testing product line and development projects for (i) an updated radio frequency card and (ii) an updated channel emulation product code named "Project Aspen."
D. "Divestiture Date" means the date on which the Divestiture Assets are divested to Acquirer pursuant to this Final Judgment.
E. "Including" means including but not limited to.
F. "Keysight" means Defendant Keysight Technologies, Inc., incorporated in Delaware with its headquarters in Santa Rosa, California, its successors and assigns, and its subsidiaries, divisions, groups, affiliates, partnerships, and joint ventures, and their directors, officers, managers, agents, and employees.
G. "Regulatory Approvals" means (1) any approvals or clearances under antitrust, competition, or foreign direct investment laws that are required for the Transaction to proceed; (2) any approvals or clearances under antitrust, competition, or foreign direct investment laws that are required for Acquirer's acquisition of the Divestiture Assets to proceed; and (3) the sanctioning by the High Court of Justice in England and Wales of the scheme of arrangement pursuant to which the Defendants are effecting the Transaction.
H. "Relevant Personnel" means all full-time, part-time, or contract employees of Spirent, wherever located, whose job responsibilities relate in any way to the Divestiture Assets or the design, production, and sale of high-speed ethernet testing, network security testing, and radio frequency (RF) channel emulators, except to the extent Acquirer determines that such employees are not necessary to the operation of the Divestiture Business. The United States, in its sole discretion, will resolve any disagreement regarding which employees are Relevant Personnel.
I. "Spirent" means Defendant Spirent Communications, plc, which is registered in England and Wales with its headquarters in Crawley, West Sussex RH10 1BD, United Kingdom, its successors and assigns, and its subsidiaries, divisions, groups, affiliates, partnerships, and joint ventures, and their directors, officers, managers, agents, and employees.
J. "Transaction" means the proposed acquisition of Spirent by Keysight.
K. "Viavi" means Viavi Solutions, Inc., a Delaware corporation with its headquarters in Chandler, Arizona, its successors and assigns, and its subsidiaries, divisions, groups, affiliates, partnerships, and joint ventures, and their directors, officers, managers, agents, and employees.
III. Applicability
[top] A. This Final Judgment applies to Defendants, as defined above, and all other persons in active concert or participation with any Defendant who
B. If, prior to complying with Section IV of this Final Judgment, Defendants sell or otherwise dispose of all or substantially all of the assets or of business units that include the Divestiture Assets, Defendants must require any purchaser to be bound by the provisions of this Final Judgment.
IV. Divestiture
A. Defendants are ordered and directed, within ten (10) calendar days after the Court's entry of the Asset Preservation and Hold Separate Stipulation and Order in this matter or within ten (10) calendar days after Regulatory Approvals are received, whichever is later, to divest the Divestiture Assets in a manner consistent with this Final Judgment to Acquirer. The United States, in its sole discretion, may agree to one or more extensions of this time period not to exceed ninety (90) calendar days in total and will notify the Court of any extension.
B. For all contracts, agreements, and customer relationships (or portions of such contracts, agreements, and customer relationships) included in the Divestiture Assets, Defendants must assign or otherwise transfer all contracts, agreements, and customer relationships to Acquirer within the deadlines set forth in Paragraph IV.A; provided, however, that for any contract or agreement that requires the consent of another party to assign or otherwise transfer, Defendants must use best efforts to accomplish the assignment or transfer. Defendants must not interfere with any negotiations between Acquirer and a contracting party.
C. Defendants must use best efforts to divest the Divestiture Assets as expeditiously as possible. Defendants must take no action that would jeopardize the completion of the divestiture ordered by the Court, including any action to impede the permitting, operation, or divestiture of the Divestiture Assets.
D. Unless the United States otherwise consents in writing, divestiture pursuant to this Final Judgment must include the entire Divestiture Assets and must be accomplished in such a way as to satisfy the United States, in its sole discretion, that the Divestiture Assets can and will be used by Acquirer as part of a viable, ongoing business of the design, production, and sale of high-speed ethernet testing, network security testing, and radio frequency (RF) channel emulators and that the divestiture to Acquirer will remedy the competitive harm alleged in the Complaint.
E. The divestiture must be made to an Acquirer that, in the United States' sole judgment, has the intent and capability, including the necessary managerial, operational, technical, and financial capability, to compete effectively in the design, production, and sale of high-speed ethernet testing, network security testing, and radio frequency (RF) channel emulators.
F. The divestiture must be accomplished in a manner that satisfies the United States, in its sole discretion, that none of the terms of any agreement between Acquirer and Defendants give Defendants the ability unreasonably to raise Acquirer's costs, to lower Acquirer's efficiency, or otherwise interfere in the ability of Acquirer to compete effectively in the design, production, and sale of high-speed ethernet testing, network security testing, and radio frequency (RF) channel emulators.
G. In the event Defendants are attempting to divest the Divestiture Assets to an Acquirer other than Viavi, Defendants promptly must make known, by usual and customary means, the availability of the Divestiture Assets. Defendants must inform any person making an inquiry relating to a possible purchase of the Divestiture Assets that the Divestiture Assets are being divested in accordance with this Final Judgment and must provide that person with a copy of this Final Judgment. Defendants must offer to furnish to all prospective Acquirers, subject to customary confidentiality assurances, all information and documents relating to the Divestiture Assets that are customarily provided in a due diligence process; provided, however, that Defendants need not provide information or documents subject to the attorney-client privilege or work-product doctrine. Defendants must make all information and documents available to the United States at the same time that the information and documents are made available to any other person.
H. Defendants must provide prospective Acquirers with (1) access to make inspections of the Divestiture Assets; (2) access to all environmental, zoning, and other permitting documents and information relating to the Divestiture Assets; and (3) access to all financial, operational, or other documents and information relating to the Divestiture Assets that would customarily be provided as part of a due diligence process. Defendants also must disclose all encumbrances on any part of the Divestiture Assets, including on intangible property.
I. Defendants must cooperate with and assist Acquirer in identifying and, at the option of Acquirer, hiring all Relevant Personnel, including:
1. No later than the date that is the later of (a) ten (10) business days following the entry of the Asset Preservation and Hold Separate Stipulation and Order in this matter and (b) ten (10) business days prior to the Divestiture Date, Defendants must identify all Relevant Personnel to Acquirer and the United States, including by providing organization charts or equivalent information to show how all Relevant Personnel fit into Spirent's existing organizational structure.
2. Within ten (10) business days following receipt of a request by Acquirer or the United States, Defendants must provide to Acquirer and the United States additional information relating to Relevant Personnel, including name, job title, reporting relationships, past experience, responsibilities, training and educational histories, relevant certifications, and job performance evaluations. Defendants must also provide to Acquirer and the United States information showing current and accrued compensation and benefits of Relevant Personnel, including most recent bonuses paid, aggregate annual compensation, current target or guaranteed bonus, if any, any retention agreement or incentives, any equity or equity-based incentive compensation arrangements, any commission-based compensation arrangements, and any other payments due, compensation or benefits accrued, or promises made to the Relevant Personnel. If Defendants are barred by any applicable law from providing any of this information, Defendants must provide, within ten (10) business days following receipt of the request, the requested information to the full extent permitted by law and also must provide a written explanation of Defendants' inability to provide the remaining information, including specifically identifying the provisions of the applicable laws.
3. At the request of Acquirer, Defendants must promptly make Relevant Personnel available for private interviews with Acquirer during normal business hours at a mutually agreeable location.
[top] 4. Defendants must not interfere with any effort by Acquirer to employ any Relevant Personnel. Interference includes offering to increase the compensation or improve the benefits of Relevant Personnel unless (a) the offer
5. For Relevant Personnel who elect employment with Acquirer within one hundred and eighty (180) calendar days of the Divestiture Date or whose employment transfers automatically to Acquirer as of the Divestiture Date, Defendants must waive all non-compete and nondisclosure agreements with respect to the Divestiture Assets and the Divestiture Business; vest and pay to the Relevant Personnel (or to Acquirer for payment to the employee) on a prorated basis any bonuses, incentives, other salary, benefits or other compensation fully or partially accrued at the time of the transfer of the employee to Acquirer; vest any unvested pension and other equity rights; and provide all other benefits, if any, that those Relevant Personnel otherwise would have been provided had the Relevant Personnel continued employment with Defendants, including any retention bonuses or payments. Notwithstanding the foregoing, Defendants may maintain reasonable restrictions on disclosure by Relevant Personnel of Defendants' proprietary non-public information that is unrelated to the Divestiture Assets or the provision of commodity price assessments and related news and analysis and not otherwise required to be disclosed by this Final Judgment.
6. For a period of twelve (12) months from the Divestiture Date, Defendants may not solicit to rehire Relevant Personnel who were hired by Acquirer within ninety (90) calendar days of the Divestiture Date unless (a) an individual is terminated or laid off by Acquirer or (b) Acquirer agrees in writing that Defendants may solicit to re-hire that individual. Nothing in this Paragraph IV.I.6 prohibits Defendants from advertising employment openings using general solicitations or advertisements and re-hiring Relevant Personnel who apply for an employment opening through a general solicitation or advertisement.
J. Defendants must warrant to Acquirer that (1) the Divestiture Assets will be operational and without material defect on the date of their transfer to Acquirer; (2) there are no material defects in the environmental, zoning, or other permits relating to the operation of the Divestiture Assets; and (3) Defendants have disclosed all encumbrances on any part of the Divestiture Assets, including on intangible property. Following the sale of the Divestiture Assets, Defendants must not undertake, directly or indirectly, challenges to the environmental, zoning, or other permits relating to the operation of the Divestiture Assets.
K. Defendants must use best efforts to assist Acquirer to obtain all necessary licenses, registrations, and permits to operate the Divestiture Business. Defendants must coordinate and cooperate with Acquirer in exchanging information and assistance in connection with making all filings or notifications necessary to transfer any permits and any permit applications that are part of the Divestiture Assets to Acquirer, or in connection with any applications for new permits relating to the Divestiture Business. Until Acquirer obtains the necessary licenses, registrations, and permits, Defendants must provide Acquirer with the benefit of Defendants' licenses, registrations, and permits to the full extent permissible by law.
L. At the option of Acquirer, and subject to approval by the United States in its sole discretion, on or before the Divestiture Date, Defendants must enter into a contract or contracts with Acquirer to provide transition services (1) for a period of up to ninety (90) calendar days, for cross-docking and warehousing support, access to Divestiture Assets in Defendants' facilities, marketing, information technology services, human resources, accounting, payroll, accounts payable, accounts receivable, and revenue recognition, and export control, and (2) for a period of up to twelve (12) months, for customer service and support. All transition services contracts must be on terms and conditions reasonably related to market conditions for the provision of the transition services. Any amendment to or modification of any provision of a contract to provide transition services is subject to approval by the United States, in its sole discretion. The United States, in its sole discretion, may approve one or more extensions of any contract for transition services for a total of up to an additional ninety (90) calendar days. If Acquirer seeks an extension of the term of any contract for transition services, Defendants must notify the United States in writing at least five (5) business days after receipt of an extension notice from Acquirer. Acquirer may terminate a contract for transition services, or any portion of a contract for transition services (including all interdependent services), without cost or penalty, at any time upon thirty (30) calendar days' written notice to Defendants. The employee(s) of Defendants tasked with providing transition services must not share any competitively sensitive information of Acquirer with any other employee of Defendants.
M. If any term of an agreement between Defendants and Acquirer, including an agreement to effectuate the divestiture required by this Final Judgment, varies from a term of this Final Judgment, to the extent that Defendants cannot fully comply with both, this Final Judgment determines Defendants' obligations.
V. Appointment of Divestiture Trustee
A. If Defendants have not divested the Divestiture Assets within the period specified in Paragraph IV.A, Defendants must immediately notify the United States of that fact in writing. Upon application of the United States, which Defendants may not oppose, the Court will appoint a divestiture trustee selected by the United States and approved by the Court to effect the divestiture of the Divestiture Assets.
B. After the appointment of a divestiture trustee by the Court, only the divestiture trustee will have the right to sell those Divestiture Assets that the divestiture trustee has been appointed to sell. The divestiture trustee will have the power and authority to accomplish the divestiture to Acquirer, at a price and on terms obtainable through reasonable effort by the divestiture trustee, subject to the provisions of Sections IV, V and VI of this Final Judgment, and will have other powers as the Court deems appropriate. The divestiture trustee must sell the Divestiture Assets as quickly as possible.
C. Defendants may not object to a sale by the divestiture trustee on any ground other than malfeasance by the divestiture trustee. Objections by Defendants must be conveyed in writing to the United States and the divestiture trustee within ten (10) calendar days after the divestiture trustee has provided the notice of proposed divestiture required by Section VI.
D. The divestiture trustee will serve at the cost and expense of Defendants pursuant to a written agreement, on terms and conditions, including confidentiality requirements and conflict of interest certifications, approved by the United States in its sole discretion.
[top] E. The divestiture trustee may hire at the cost and expense of Defendants any agents or consultants, including investment bankers, attorneys, and accountants, that are reasonably necessary in the divestiture trustee's
F. The compensation of the divestiture trustee and agents or consultants hired by the divestiture trustee must be reasonable in light of the value of the Divestiture Assets and based on a fee arrangement that provides the divestiture trustee with incentives based on the price and terms of the divestiture and the speed with which it is accomplished. If the divestiture trustee and Defendants are unable to reach agreement on the divestiture trustee's compensation or other terms and conditions of engagement within fourteen (14) calendar days of the appointment of the divestiture trustee by the Court, the United States, in its sole discretion, may take appropriate action, including by making a recommendation to the Court. Within three (3) business days of hiring an agent or consultant, the divestiture trustee must provide written notice of the hiring and rate of compensation to Defendants and the United States.
G. The divestiture trustee must account for all monies derived from the sale of the Divestiture Assets sold by the divestiture trustee and all costs and expenses incurred. Within thirty (30) calendar days of the Divestiture Date, the divestiture trustee must submit that accounting to the Court for approval. After approval by the Court of the divestiture trustee's accounting, including fees for unpaid services and those of agents or consultants hired by the divestiture trustee, all remaining money must be paid to Defendants and the trust will then be terminated.
H. Defendants must use best efforts to assist the divestiture trustee to accomplish the required divestiture. Subject to reasonable protection for trade secrets, other confidential research, development, or commercial information, or any applicable privileges, Defendants must provide the divestiture trustee and agents or consultants retained by the divestiture trustee with full and complete access to all personnel, books, records, and facilities of the Divestiture Assets. Defendants also must provide or develop financial and other information relevant to the Divestiture Assets that the divestiture trustee may reasonably request. Defendants must not take any action to interfere with or to impede the divestiture trustee's accomplishment of the divestiture.
I. The divestiture trustee must maintain complete records of all efforts made to sell the Divestiture Assets, including by filing monthly reports with the United States setting forth the divestiture trustee's efforts to accomplish the divestiture ordered by this Final Judgment. The reports must include the name, address, and telephone number of each person who, during the preceding month, made an offer to acquire, expressed an interest in acquiring, entered into negotiations to acquire, or was contacted or made an inquiry about acquiring any interest in the Divestiture Assets and must describe in detail each contact.
J. If the divestiture trustee has not accomplished the divestiture ordered by this Final Judgment within one hundred and eighty (180) calendar days of appointment, the divestiture trustee must promptly provide the United States with a report setting forth: (1) the divestiture trustee's efforts to accomplish the required divestiture; (2) the reasons, in the divestiture trustee's judgment, why the required divestiture has not been accomplished; and (3) the divestiture trustee's recommendations for completing the divestiture. Following receipt of that report, the United States may make additional recommendations to the Court. The Court thereafter may enter such orders as it deems appropriate to carry out the purpose of this Final Judgment, which may include extending the trust and the term of the divestiture trustee's appointment by a period requested by the United States.
K. The divestiture trustee will serve until divestiture of all Divestiture Assets to Acquirer is completed or for a term otherwise ordered by the Court.
L. If the United States determines that the divestiture trustee is not acting diligently or in a reasonably cost-effective manner, the United States may recommend that the Court appoint a substitute divestiture trustee.
VI. Notice of Proposed Divestiture
A. Within two (2) business days following execution of a definitive agreement with an Acquirer other than Viavi to divest the Divestiture Assets, Defendants or the divestiture trustee, whichever is then responsible for effecting the divestiture, must notify the United States of the proposed divestiture. If the divestiture trustee is responsible for completing the divestiture, the divestiture trustee also must notify Defendants. The notice must set forth the details of the proposed divestiture and list the name, address, and telephone number of each person not previously identified who offered or expressed an interest in or desire to acquire any ownership interest in the Divestiture Assets.
B. After receipt by the United States of the notice required by Paragraph VI.A, the United States may make one or more requests to Defendants or the divestiture trustee for additional information concerning the proposed divestiture, the proposed Acquirer, and other prospective Acquirers. Defendants and the divestiture trustee must furnish any additional information requested within fifteen (15) calendar days of the receipt of each request unless the United States provides written agreement to a different period.
C. Within forty-five (45) calendar days after receipt of the notice required by Paragraph VI.A or within twenty (20) calendar days after the United States has been provided the additional information requested pursuant to Paragraph VI.B, whichever is later, the United States will provide written notice to Defendants and any divestiture trustee that states whether the United States, in its sole discretion, objects to the proposed Acquirer or any other aspect of the proposed divestiture. Without written notice that the United States does not object, a divestiture may not be consummated. If the United States provides written notice that it does not object, the divestiture may be consummated, subject only to Defendants' limited right to object to the sale under Paragraph V.C of this Final Judgment. Upon objection by Defendants pursuant to Paragraph V.C, a divestiture by the divestiture trustee may not be consummated unless approved by the Court.
VII. Financing
Defendants may not finance all or any part of Acquirer's purchase of all or part of the Divestiture Assets.
VIII. Asset Preservation and Hold Separate Obligations
Defendants must take all steps necessary to comply with the Asset Preservation and Hold Separate Stipulation and Order entered by the Court.
IX. Affidavits
[top] A. Within twenty (20) calendar days of the entry of the Asset Preservation and Hold Separate Stipulation and Order in this matter, and every thirty (30) calendar days thereafter until the divestiture required by this Final Judgment has been completed, each Defendant must deliver to the United States an affidavit, signed by each
B. In the event Defendants are attempting to divest the Divestiture Assets to an Acquirer other than Viavi, each affidavit required by Paragraph IX.A must include: (1) the name, address, and telephone number of each person who, during the preceding thirty (30) calendar days, made an offer to acquire, expressed an interest in acquiring, entered into negotiations to acquire, or was contacted or made an inquiry about acquiring, an interest in the Divestiture Assets and describe in detail each contact with such persons during that period; (2) a description of the efforts Defendants have taken to solicit buyers for and complete the sale of the Divestiture Assets and to provide required information to prospective Acquirers; and (3) a description of any limitations placed by Defendants on information provided to prospective Acquirers. Objection by the United States to information provided by Defendants to prospective Acquirers must be made within fourteen (14) calendar days of receipt of the affidavit, except that the United States may object at any time if the information set forth in the affidavit is not true or complete.
C. Defendants must keep all records of any efforts made to divest the Divestiture Assets until one year after the Divestiture Date.
D. Within twenty (20) calendar days of the Asset Preservation and Hold Separate Stipulation and Order in this matter, each Defendant must deliver to the United States an affidavit signed by each Defendant's Chief Financial Officer and General Counsel, that describes in reasonable detail all actions that Defendant has taken and all steps that Defendant has implemented on an ongoing basis to comply with Section VIII of this Final Judgment. The United States, in its sole discretion, may approve different signatories for the affidavits.
E. If a Defendant makes any changes to actions and steps described in affidavits provided pursuant to Paragraph IX.D, that Defendant must, within fifteen (15) calendar days after any change is implemented, deliver to the United States an affidavit describing those changes.
F. Defendants must keep all records of any efforts made to comply with Section VIII until one year after the Divestiture Date.
X. Compliance Inspection
A. For the purposes of determining or securing compliance with this Final Judgment or of related orders such as the Asset Preservation and Hold Separate Stipulation and Order or of determining whether this Final Judgment should be modified or vacated, upon written request of an authorized representative of the Assistant Attorney General for the Antitrust Division, and reasonable notice to Defendants, Defendants must permit, from time to time and subject to legally recognized privileges, authorized representatives, including agents retained by the United States:
1. to have access during Defendants' office hours to inspect and copy, or at the option of the United States, to require Defendants to provide electronic copies of all books, ledgers, accounts, records, data, and documents, wherever located, in the possession, custody, or control of Defendants relating to any matters contained in this Final Judgment; and
2. to interview, either informally or on the record, Defendants' officers, employees, or agents, wherever located, who may have their individual counsel present, relating to any matters contained in this Final Judgment. The interviews must be subject to the reasonable convenience of the interviewee and without restraint or interference by Defendants.
B. Upon the written request of an authorized representative of the Assistant Attorney General for the Antitrust Division, Defendants must submit written reports or respond to written interrogatories, under oath if requested, relating to any matters contained in this Final Judgment.
XI. Firewalls
A. Defendants must implement and maintain effective procedures to prevent Acquirer's competitively sensitive information from being shared or disclosed, by or through implementation and execution of the obligations required by this Final Judgment and any associated agreements, including agreements entered pursuant to Paragraph IV.L, by the employees of Defendants tasked with providing transition services to Acquirer (collectively "Firewall Employees") and any other employees of Defendants.
B. Defendants must, within thirty (30) calendar days of the entry of the Asset Preservation Stipulation and Order, submit to the United States a compliance plan setting forth in detail the procedures Defendants propose to implement to effect compliance with this Section XI. The United States must inform Defendants within ten (10) business days of receipt whether, in its sole discretion, the United States approves or rejects Defendants' compliance plan. Within ten (10) business days of receiving a notice of rejection, Defendants must submit a revised compliance plan. The United States may request that the Court determine whether Defendants' proposed compliance plan fulfills the requirements of this Section XI.
C. At minimum, an effective compliance plan must include, for all Firewall Employees, (1) initial written notice on or before the Divestiture Date followed by quarterly written reminders, (2) training within thirty (30) calendar days of the Divestiture Date, and (3) provision of written acknowledgment of the obligations of this Section XI within thirty (30) calendar days of the Divestiture Date. The form of all written notifications must be approved by the United States, in its sole discretion. Defendants must maintain complete records of all written notices, training, employee acknowledgments, and all other efforts made to comply with this Section XI until the expiration of all transition services agreements between Keysight and Acquirer or twelve (12) months after the Divestiture Date, whichever is later.
XII. No Reacquisition
Defendants may not reacquire any part of or any interest in the Divestiture Assets during the term of this Final Judgment without prior written authorization of the United States.
XIII. Public Disclosure
A. No information or documents obtained pursuant to any provision this Final Judgment, may be divulged by the United States to any person other than an authorized representative of the executive branch of the United States, except in the course of legal proceedings to which the United States is a party, including grand-jury proceedings, for the purpose of evaluating a proposed Acquirer or securing compliance with this Final Judgment, or as otherwise required by law.
[top] B. In the event of a request by a third party, pursuant to the Freedom of Information Act, 5 U.S.C. 552, for disclosure of information obtained pursuant to any provision of this Final Judgment, the Antitrust Division will act in accordance with that statute, and the Department of Justice regulations at 28 CFR part 16, including the provision on confidential commercial information,
C. If at the time that Defendants furnish information or documents to the United States pursuant to any provision of this Final Judgment, Defendants represent and identify in writing information or documents for which a claim of protection may be asserted under Rule 26(c)(1)(G) of the Federal Rules of Civil Procedure, and Defendants mark each pertinent page of such material, "Subject to claim of protection under Rule 26(c)(1)(G) of the Federal Rules of Civil Procedure," the United States must give Defendants ten (10) calendar days' notice before divulging the material in any legal proceeding (other than a grand jury proceeding).
XIV. Retention of Jurisdiction
The Court retains jurisdiction to enable any party to this Final Judgment to apply to the Court at any time for further orders and directions as may be necessary or appropriate to carry out or construe this Final Judgment, to modify any of its provisions, to enforce compliance, and to punish violations of its provisions.
XV. Enforcement of Final Judgment
A. If any time during the five-year period following entry of this Final Judgment, the United States determines at its sole discretion that the Final Judgment has failed to fully redress the violations alleged in the Complaint, then the United States may re-open this proceeding to seek additional relief, including divestiture of additional assets. Such additional relief may be ordered by this Court upon a finding by a preponderance of the evidence that there is a reasonable probability that the proposed Final Judgment did not fully redress the violations alleged in the Complaint.
B. The United States retains and reserves all rights to enforce the provisions of this Final Judgment, including the right to seek an order of contempt from the Court. Defendants agree that in a civil contempt action, a motion to show cause, or a similar action brought by the United States relating to an alleged violation of this Final Judgment, the United States may establish a violation of this Final Judgment and the appropriateness of a remedy therefor by a preponderance of the evidence, and Defendants waive any argument that a different standard of proof should apply.
C. This Final Judgment should be interpreted to give full effect to the procompetitive purposes of the antitrust laws and to restore the competition the United States alleges was harmed by the challenged conduct. Defendants agree that they may be held in contempt of, and that the Court may enforce, any provision of this Final Judgment that, as interpreted by the Court in light of these procompetitive principles and applying ordinary tools of interpretation, is stated specifically and in reasonable detail, whether or not it is clear and unambiguous on its face. In any such interpretation, the terms of this Final Judgment should not be construed against either party as the drafter.
D. In an enforcement proceeding in which the Court finds that Defendants have violated this Final Judgment, the United States may apply to the Court for an extension of this Final Judgment, together with other relief that may be appropriate. In connection with a successful effort by the United States to enforce this Final Judgment against a Defendant, whether litigated or resolved before litigation, that Defendant agrees to reimburse the United States for the fees and expenses of its attorneys, as well as all other costs including experts' fees, incurred in connection with that effort to enforce this Final Judgment, including in the investigation of the potential violation.
E. For a period of four (4) years following the expiration of this Final Judgment, if the United States has evidence that a Defendant violated this Final Judgment before it expired, the United States may file an action against that Defendant in this Court requesting that the Court order: (1) Defendant to comply with the terms of this Final Judgment for an additional term of at least four (4) years following the filing of the enforcement action; (2) all appropriate contempt remedies; (3) additional relief needed to ensure the Defendant complies with the terms of this Final Judgment; and (4) fees or expenses as called for by this Section XV.
XVI. Expiration of Final Judgment
Unless the Court grants an extension, this Final Judgment will expire ten (10) years from the date of its entry, except that after five (5) years from the date of its entry, this Final Judgment may be terminated upon notice by the United States to the Court and Defendants that the divestiture has been completed and continuation of this Final Judgment is no longer necessary or in the public interest.
XVII. Public Interest Determination
Entry of this Final Judgment is in the public interest. The parties have complied with the requirements of the Antitrust Procedures and Penalties Act, 15 U.S.C. 16, including by making available to the public copies of this Final Judgment and the Competitive Impact Statement, public comments thereon, and any response to comments by the United States. Based upon the record before the Court, which includes the Competitive Impact Statement and, if applicable, any comments and response to comments filed with the Court, entry of this Final Judgment is in the public interest.
Date:
Court approval subject to procedures of Antitrust Procedures and Penalties Act, 15 U.S.C. 16.
United States District Judge
Annex 1
Schedule to II.B.3-Transferred Fixtures
Revised HSE and CE PPE Listing as at 31 December 2024 Stated as at May 15th, 2025
BILLING CODE 4410-11-P
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BILLING CODE 4410-11-C
Annex 2
Schedule to II.B.4-Excluded Contracts
(i)
1. Spirent Intermediary/Partner Code of Conduct, dated as of June 9, 2023, by [Counterparty 1]. 1
Footnotes:
1 ?Counterparty names have been omitted for confidentiality purposes.
2. Intermediary Framework Agreement, dated as of March 2, 2023, by and between Spirent UK and [Counterparty 1].
3. Pace Partner Program Master Distributor Agreement, dated as of September 23, 2019, by and between Spirent US and [Counterparty 2].
4. Intermediary Framework Agreement, dated as of August 17, 2021, by and among Spirent UK, octoScope, Inc., Spirent US and [Counterparty 3].
5. International Distributer Agreement, dated as of June 4, 2001, by and between Spirent US and [Counterparty 4], as amended by Amendment No.1, dated as of March 27, 2003, Amendment No. 2, dated as of July 10, 2006, and Amendment No. 3, dated as of December 1, 2010.
6. Pace Partner Program Reseller Agreement, dated as of March 13, 2019, by and between Spirent Asia and [Counterparty 5].
7. Pace Partner Program Authorized Representative Agreement, dated as of March 25, 2019, by and between Spirent US and [Counterparty 6].
8. Intermediary Framework Agreement, dated as of February 25, 2021, by and between Spirent UK and [Counterparty 7].
9. International Non-Exclusive Distributor Agreement, dated as of December 1, 2011, by and between Spirent Communications (International) Limited and [Counterparty 7], as amended by Amendment No. 1, July 1, 2016.
10. Software License, dated as of December 1, 2011, by and between Spirent Communications (International) Limited and [Counterparty 7].
11. Intermediary Framework Agreement, dated as of December 8, 2020, by and between Spirent UK and [Counterparty 8].
12. Intermediary Framework Agreement, dated as of December 3, 2020, by and between Spirent Asia and [Counterparty 9].
13. Exclusive Reseller Agreement, dated as of June 22, 2014, by and between octoScope, Inc. and [Counterparty 10].
14. Pace Partner Program Reseller Agreement, dated as of April 29, 2019, by and between Spirent UK and [Counterparty 11].
15. Distributor Agreement, dated as of September 22, 2020, by and between Spirent Asia and [Counterparty 12].
16. Spirent Security Testing and Monitoring Consulting Services for SecurityLabs Services Agreement, dated as of September 22, 2020, by and between Spirent Asia and [Counterparty 12].
17. Spirent Professional Services Agreement, dated as of September 22, 2020, by and between Spirent Asia and [Counterparty 12].
18. Intermediary Framework Agreement, dated as of June 14, 2023, by and among Spirent Positioning, Spirent France, and [Counterparty 13].
19. Intermediary Framework Agreement, dated as of April 26, 2024, by and among Spirent Asia, Spirent Positioning and [Counterparty 14].
20. Pace Partner Program Reseller Agreement, dated as of April 13, 2020, by and between Spirent Asia and [Counterparty 15].
21. Intermediary Framework Agreement, dated as of December 22, 2021, by and between Spirent Asia and [Counterparty 15], as amended by Amendment No. 1, dated as of September 27, 2022.
22. Pace Partner Program Reseller Agreement, dated as of September 29, 2020, by and between Spirent Asia and [Counterparty 16].
23. Intermediary Framework Agreement, dated as of January 1, 2022, by and among Spirent Asia, octoScope, Inc. and [Counterparty 17].
24. Distribution Agreement, dated as of March 9, 2007, by and between Spirent Communications Plc and [Counterparty 18], as amended by Amendment No. 1, dated as of November 24, 2010.
25. Pace Partner Program Reseller Agreement, dated as of June 28, 2019, by and between Spirent US and [Counterparty 19].
26. Authorized Representative Agreement, dated as of August 25, 2020, by and between Spirent US and [Counterparty 20].
27. Pace Partner Program Reseller Agreement, dated as of August 18, 2018, by and between Spirent Asia and [Counterparty 21].
28. Pace Partner Program Reseller Agreement, dated as of May 13, 2019, by and between Spirent US and [Counterparty 22].
29. Intermediary Framework Agreement, dated as of August 16, 2022, by and between Spirent UK and [Counterparty 22].
30. Distributor Agreement, dated as of March 25, 2010, by and between Spirent Communications plc and [Counterparty 23], as amended by Amendment No. 1, dated as of November 24, 2010.
31. International No-Exclusive Distributor Agreement, dated as of January 1, 2013, by and between Spirent Communications (International) Limited and [Counterparty 23], as amended by Amendment No. 1, dated as of August 1, 2016.
32. Pace Partner Program Reseller Agreement, dated as of May 28, 2019, by and between Spirent Asia and [Counterparty 24], as amended by Amendment No. 1, dated as of March 13, 2020.
33. Pace Partner Program Reseller Agreement, dated as of May 14, 2020, by and between Spirent Asia and [Counterparty 25].
34. Pace Partner Program Reseller Agreement, dated as of May 14, 2020, by and between Spirent Positioning and [Counterparty 25].
35. Reseller Agreement, dated as of September 15, 2014, by and between Spirent US and [Counterparty 26].
36. Software License, dated as of September 15, 2014, by and between Spirent US and [Counterparty 26].
37. Sales Representation Agreement, dated as of August 20, 2009, by and between [Counterparty 27].
[top] 38. Intermediary Framework Agreement, dated as of April 28, 2022, by and between Spirent Asia and [Counterparty 28], as amended by Amendment No. 1., dated as of December 20, 2022.
39. Intermediary Framework Agreement, dated as of January 1, 2022, by and among [Counterparty 29], Spirent Positioning, octoScope, Inc. and Spirent Asia, as amended by Amendment #1, dated as of October 27, 2022.
40. Pace Partner Program Authorized Representative Agreement, dated as of April 24, 2020, by and between Spirent Asia and [Counterparty 30].
(ii)
1. Corporate Services Commercial Account Agreement, dated as of January 9, 2012, by and between Spirent and [Counterparty 31].
2. Annual Billing Commitment under Microsoft Agreement, dated as of April 6, 2023, by and between Spirent and [Counterparty 32].
3. Annual Billing Commitment under Microsoft Agreement, dated as of April 1, 2024, by and between Spirent and [Counterparty 32].
4. Wireless Consulting and Services Agreement, dated as of August 30, 2023, by and between Spirent US and [Counterparty 33].
Annex 3
Schedule to II.B.9-Transferred Intellectual Property
Registered Company Patents
STC, Automotive and Security:
BILLING CODE 4410-11-P
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Channel Emulation:
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Registered Company Trademarks
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Unregistered Company Brand Names
"TestCenter"
"Avalanche"
"Cyberflood"
"Vertex"
Domain Names
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BILLING CODE 4410-11-C
Annex 4
Schedule to II.C-Divestiture Business Products
High-speed ethernet solutions
• Spirent TestCenter
• SX
• AX
• AION
• Smartbits
• Spirent Vnimble
Automotive testing solutions
• TTworkbench
• TTman
• TTsuite
• TTthree
Network security solutions
• Avalanche
• Cyberflood
• Cyberflood Virtual
• Spirent Studio
Channel emulation solutions
• Vertex
• Legacy channel emulation products (WIRELESS VCE6; WIRELESS VR5; WIRELESS FADER TOOLS; WIRELESS SR 5500)
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United States District Court for the District of Columbia
United States of America , Plaintiff, v. Keysight Technologies, Inc. and Spirent Communications PLC, Defendants.
Civil Action No. 1:25-cv-01734-CJN
Judge: Carl J. Nichols
Competitive Impact Statement
In accordance with the Antitrust Procedures and Penalties Act, 15 U.S.C. 16(b)-(h) (the "APPA" or "Tunney Act"), the United States of America files this Competitive Impact Statement related to the proposed Final Judgment filed in this civil antitrust proceeding.
I. Nature and Purpose of the Proceeding
On March 28, 2024, Keysight Technologies Inc. ("Keysight") offered to acquire Spirent Communications plc ("Spirent") for approximately $1.5 billion, and Spirent's shareholders voted to accept this offer on May 22, 2024. The United States filed a civil antitrust Complaint on June 2, 2025, seeking to enjoin the proposed acquisition. The Complaint alleges that the likely effect of this acquisition would be to substantially lessen competition for the development, manufacture, and sale of three key types of communications testing and measurement equipment-high-speed ethernet testing equipment, network security testing equipment, and radiofrequency ("RF") channel emulators-to customers in the United States, in violation of Section 7 of the Clayton Act, 15 U.S.C. 18.
At the same time the Complaint was filed, the United States filed a proposed Final Judgment and an Asset Preservation and Hold Separate Stipulation and Order ("Stipulation and Order"), which are designed to remedy the loss of competition alleged in the Complaint.
Under the proposed Final Judgment, which is explained more fully below, Defendants are required to divest the identified Divestiture Assets in each of the three Divestiture Businesses where competitive harm is alleged. The Divestiture Businesses are high-speed ethernet testing, network security testing, and RF channel emulators, as detailed in the proposed Final Judgment. These assets must be divested to a third-party acquirer approved by the United States. Viavi Solutions, Inc. has already entered into an agreement with Defendants to acquire the Divestiture Assets and is an approved acquirer, and divestiture could also be made to an alternative acquirer if approved by the United States.
The Stipulation and Order requires Defendants to take certain steps to preserve competition and to ensure the competitiveness of the Divestiture Assets pending entry of final judgment by this Court. Specifically, Defendants must operate, preserve, and maintain the Divestiture Assets as ongoing, economically fully viable, marketable, and competitive assets until the required divestiture is complete. In addition, management, sales, and operations of Divestiture Assets must be held entirely separate, distinct, and apart from Defendants' other operations. The Stipulation and Order also provides firewalls to ensure Keysight cannot access competitively sensitive information from the Divestiture Businesses.
The United States and Defendants have stipulated that the proposed Final Judgment may be entered after compliance with the APPA. Entry of the proposed Final Judgment will terminate this action, except that the Court will retain jurisdiction to construe, modify, or enforce the provisions of the proposed Final Judgment and to punish violations thereof.
II. Description of Events Giving Rise to the Alleged Violation
A. The Defendants and the Proposed Transaction
Keysight is a Delaware corporation headquartered in Santa Rosa, California. It is a leading provider of communications testing and measurement equipment in the U.S. and worldwide. Keysight's fiscal year 2024 global revenues were approximately $4.979 billion, $1.769 billion of which were from the United States. Keysight's Communications Solutions Group produces and sells the products in the relevant markets at issue. The Communications Solutions Group includes two main areas: (i) commercial communications and (ii) aerospace, defense and government.
Spirent is a United Kingdom corporation headquartered in Crawley, England, with offices in Calabasas, California and other locations in and outside the United States. It is also a leading provider of communications testing and measurement equipment in the U.S. and worldwide. Spirent earned $460 million in global revenues in 2024, $257 million of which were from the United States.
On March 28, 2024, Keysight offered to purchase Spirent for $1.5 billion. Spirent's board recommended that Spirent shareholders accept Keysight's offer, which they did on May 22, 2024.
B. The Competitive Effects of the Transaction
Keysight and Spirent provide critical, highly-specialized equipment used to test various components of communications networks and measure and validate network performance. Together, they dominate three key communications testing and measurement markets in the United States: high-speed ethernet testing, network security testing, and RF channel emulators. Keysight and Spirent are each other's closest competitors in these markets. For years, competition between them has resulted in each company offering discounts, maintaining valuable aftermarket support services, and investing in new and advanced products and features-all to the benefit of their customers and the broader public. Keysight's proposed acquisition of Spirent would eliminate this competition, leading to higher prices; lower quality products, support, and service; and less innovation.
1. Industry Overview
Communications networks connect the world, moving significant volumes of data around the clock. The communications industry uses specialized testing equipment to verify the performance of communications networks and the devices connected to them. This testing is essential to validate that a network performs as expected, even under non-ideal conditions, such as conditions that interfere with a wireless signal, or to ensure that networks and equipment can handle increasing loads of traffic. Testing also helps ensure that user data is securely protected against the threat of cyberattack. To complete this testing, equipment manufacturers and network operators purchase specialized hardware and software equipment, and they rely on periodic software updates and multi-year services contracts to provide regular maintenance and system upgrades.
[top] Network equipment manufacturers, communications network operators, and large cloud computing providers purchase and use this specialized testing equipment to ensure their products and networks operate effectively and securely under normal conditions, and to prepare them to withstand the real-world strain of interruptions, cyberattacks, interference, and high user demand. Because communications technologies are rapidly evolving, the communications industry invests millions of dollars annually in researching, developing, and implementing upgrades to their
Customers use lab testing equipment throughout the lifecycle of a network, even after the network or devices in it have been deployed. Lab testing ensures that communications networks can support updated devices, comply with revised industry standards, and maintain data security as the cybersecurity landscape changes.
Lab testing equipment requires constant engineering investment. Network technology changes rapidly: data moves faster, mobile wireless providers deploy new spectrum and new wireless technologies, would-be hackers develop new lines of attack, and device manufacturers make each iteration of their product more sophisticated. Lab testing equipment providers, including Keysight and Spirent, spend millions of dollars each year on research and development to ensure their products keep pace with market changes and employ hundreds of specialized experts dedicated to improving their testing equipment and responding to customer requests.
Accurate lab testing capabilities are critical to the development, validation, and maintenance of wireline and wireless communications devices and networks. A wide range of customers depend on specialized lab testing equipment to successfully deploy their networks and devices, including network equipment manufacturers, network operators, chipset manufacturers, "hyperscalers" that offer cloud computing services, research labs, government testing centers, and large companies operating secure internal networks. Equipment cannot be effectively deployed in these complex networks without such testing.
2. Relevant Markets Affected by the Proposed Acquisition
The Complaint alleges likely harm to competition in three distinct product markets within the communications testing and measurement industry: (1) high-speed ethernet testing; (2) network security testing; and (3) radiofrequency ("RF") channel emulation.
a. High-Speed Ethernet Testing
High-speed ethernet testing equipment tests the performance of both the hardware and software components of high-speed wireline communications networks. Specifically, it tests the functionality of communications both within a given network and across different networks. This testing ensures that wireline networks can support high-bandwidth use cases, such as running artificial intelligence algorithms. These testing products are crucial to ensure that large network operators can support data usage at scale.
Customers using high-speed ethernet testing equipment have no reasonable alternatives for testing their wireline network equipment. Solutions developed in-house or relying on open-source software would not provide an adequate alternative for most customers. Attempting to use such options would require costly investments in engineering and other technical resources, can take years to develop, and would not be as reliable or robust as the high-speed ethernet testing equipment available from Keysight or Spirent. A hypothetical monopolist could profitably impose a small but significant and non-transitory price increase for, or otherwise degrade quality of, high-speed ethernet testing equipment sold to customers in the United States. A degradation of quality could entail any dimension of competition, including service, capacity investment, choice of product variety or features, or innovation. Accordingly, high-speed ethernet testing equipment sold to U.S. customers constitutes a relevant market and line of commerce under Section 7 of the Clayton Act, 15 U.S.C. 18.
b. Network Security Testing
Network security testing equipment assesses the cybersecurity of wireline networks through laboratory simulation of attacks, testing firewalls as well as other security-related features like proxy and secure content gateways. These products simulate real-world conditions, such as high traffic volumes, to ensure that a network's security policies protect it from attack without impacting performance.
Customers that purchase network security testing equipment have no reasonable alternatives. Although some companies make use of open-source software or internally developed tools for limited purposes, self-supply is not a viable option for most customers due to the high costs involved. Customers rely on network security testing equipment to ensure sensitive data are protected from cyberattacks and are thus unlikely to rely on unproven and untested solutions in the ordinary course of business. A hypothetical monopolist could profitably impose a small but significant and non-transitory price increase for, or otherwise degrade quality of, network security testing equipment sold to customers in the United States. A quality degradation could entail any dimension of competition, including service, capacity investment, choice of product variety or features, or innovation. Accordingly, network security testing equipment sold to U.S. customers constitutes a relevant market and line of commerce under Section 7 of the Clayton Act, 15 U.S.C. 18.
c. RF Channel Emulation
RF channel emulators evaluate how wireless networks and devices will react when deployed in the real world, where a wireless signal may not be perfect. Wireless networks transmit data using radio frequency spectrum. Wireless communication networks are used across multiple important industries, including cellular networks, satellite networks, and radar and navigation systems. Unlike in a wireline environment, signal transmission through radio frequency can be subject to substantial interference from weather, large objects, topographical features, and the presence of other competing radio signals. RF channel emulators, also known as "faders," are used in a lab setting. They test whether wireless receivers, such as cell phones or radar handsets, can effectively receive and decode RF signals. A channel emulator adds various impairments to the intended communication path to simulate real-world challenges, such as dense urban settings, mountainous regions, or long distances. This performance testing enables engineers to adjust and optimize designs in a controlled environment to ensure wireless networks perform as expected once they are deployed.
[top] Customers that purchase RF channel emulators have no reasonable competitive alternatives. Although some companies make use of open-source software or internally developed tools for limited purposes, self-supply is not a viable option for most customers due to the high costs and technical expertise required to develop internal solutions. Customers rely on RF channel emulators to ensure networks will operate effectively in real-world conditions. A hypothetical monopolist could profitably impose a small but significant and non-transitory price increase for, or otherwise degrade quality of, RF channel emulators sold to customers in the United States. A degradation of quality could entail any dimension of competition, including quality, service, capacity investment, choice of product variety or features, or innovation. Accordingly, RF channel emulators sold to U.S. customers constitutes a relevant market and line of commerce under Section 7 of the Clayton Act, 15 U.S.C. 18.
3. Anticompetitive Effects
Keysight and Spirent are the dominant providers of high-speed ethernet testing equipment, network security testing equipment, and RF channel emulators in the United States. Their proposed merger would extinguish the competition between them and would presumptively result in a substantial lessening of competition in each market.
a. High-Speed Ethernet Testing
The transaction would substantially lessen competition in the market for high-speed ethernet testing equipment in the United States. Keysight and Spirent are the two principal suppliers of high-speed ethernet testing equipment in the United States and have remained the market leaders in this area for many years. In the United States, Keysight and Spirent have a combined market share of approximately 85%. The market for high-speed ethernet testing equipment is already highly concentrated and would become significantly more concentrated as a result of the proposed merger.
Keysight and Spirent compete directly against one another to provide high-speed ethernet testing equipment to customers. The handful of other market participants serve far fewer customers and offer much less robust solutions than Defendants do. Customers have benefited from competition between Defendants through lower prices, higher quality services, and more robust innovation-an essential feature as technology and network hardware testing components continuously evolve to meet and enable customer innovations.
b. Network Security Testing
The transaction also would substantially lessen competition in the market for network security testing equipment. Keysight and Spirent are the two largest suppliers of network security testing equipment in the United States and have remained the market leaders for many years. In this market, each Defendant earns more than double the revenue of any other competitor; together, Keysight and Spirent would have a combined market share of at least 60% in the United States. The market for network security testing equipment is already highly concentrated and would become significantly more concentrated after the proposed merger.
Keysight and Spirent compete head-to-head to provide network security testing equipment to customers. This competition has resulted in lower prices, higher-quality services, and faster product improvements. These updates are essential to keep pace as cybersecurity attackers develop increasingly more sophisticated methods of accessing secure networks.
c. RF Channel Emulation
The transaction also would substantially lessen competition in the market for RF channel emulators in the United States. Keysight and Spirent are two of the leading providers of RF channel emulators in the United States, with a combined market share of more than 50%. The market for RF channel emulators is already highly concentrated and would become significantly more concentrated after the proposed merger.
Keysight and Spirent compete head-to-head to provide RF channel emulators to customers. This competition has resulted in lower prices, higher-quality services, and faster product improvements. These updates are essential to keep pace as technology improves and wireless networks are used for increasingly more data traffic.
Keysight and Spirent are especially close competitors for customers who use RF channel emulators to test terrestrial wireless networks (as opposed to satellite networks) and for customers who need "external" hardware-based faders able to test a full array of RF channel emulation capabilities. Other providers of RF channel emulators only support satellite networks and/or only emulate simple interference with "internal" software-based products. Keysight and Spirent are the only providers in the United States of RF channel emulators capable of supporting the full array of test environments for terrestrial wireless networks. For U.S. customers that require these capabilities, Keysight and Spirent are their only options.
4. Barriers to Entry and Expansion
It is unlikely that any firm would enter the relevant markets in a timely manner sufficient to prevent the proposed transaction's anticompetitive effects. Successful entry into these specialized markets is difficult, time-consuming, and costly.
A prospective entrant would need to invest significant time and capital to design and develop testing products comparable to the Defendants' product lines. In each of the relevant markets, Keysight and Spirent have spent millions of dollars and many years acquiring, building, and refining their products. Moreover, the underlying communications technologies are governed by evolving standards, requiring substantial ongoing investment to ensure that a new product functions effectively with new features and meets new standards. Finally, given that these products impact the performance, security, and reliability of networks that handle sensitive data, a prospective entrant would need to devote significant resources to demonstrate its ability to provide a high-quality product and high-quality service and support, including regular updates. Purchasers of high-speed ethernet lab testing equipment, network security testing equipment, and RF channel emulators have complex needs and are reluctant to rely on any company without an established brand and reputation.
5. Absence of Efficiencies
Defendants cannot demonstrate verifiable, merger-specific efficiencies sufficient to offset the proposed merger's anticompetitive effects.
III. Explanation of the Proposed Final Judgment
Paragraph IV.A of the proposed Final Judgment requires Defendants, within ten (10) calendar days after the Court's entry of the Asset Preservation and Hold Separate Stipulation and Order, or within ten (10) calendar days after Regulatory Approvals (as defined in Paragraph II.G of the proposed Final Judgment) are received, whichever is later, to divest all rights, title and interests in and to all property and assets (collectively, the "Divestiture Assets") related to or used in connection with (i) Spirent's high-speed ethernet testing business, (ii) Spirent's network security testing business, and (iii) Spirent's RF channel emulation business (collectively, the "Divestiture Businesses") to Viavi Solutions, Inc. or another acquirer approved by the United States in its sole discretion. Defendants must take all reasonable steps necessary to accomplish the divestiture quickly and must cooperate with the acquirer.
[top] The proposed Final Judgment identifies fourteen categories of Divestiture Assets in Paragraph II.B required to be divested, including: (1) real property interests at several specified locations used in the Divestiture Businesses, in Calabasas, California; Bucharest, Romania; Honolulu, Hawaii; Beijing, China; and Bangalore, India; (2) all inventory; (3) all tangible personal property; (4) all contracts, contractual rights and customer relationships as discussed in more detail below, and with certain specified exceptions; (5) all licenses,
Paragraph IV.I of the proposed Final Judgment requires Defendants to identify all Relevant Personnel to the acquirer and the United States, including by providing the acquirer and the United States with organization charts and information relating to these employees and making them available for interviews. It also provides that Defendants must not interfere with any negotiations by the acquirer to hire these employees. In addition, for employees who elect employment with the acquirer, Defendants must waive all non-compete and non-disclosure agreements, vest all unvested pension and other equity rights, provide any pay pro rata, provide all compensation and benefits that those employees have fully or partially accrued, and provide all other benefits that the employees would generally be provided had those employees continued employment with Defendants, including but not limited to any retention bonuses or payments. This paragraph further provides that Defendants may not solicit to hire any of those employees who were hired by the acquirer, unless an employee is terminated or laid off by the acquirer or the acquirer agrees in writing that Defendants may solicit to hire that individual. The non-solicitation period in the proposed Final Judgment runs for twelve (12) months from the date of the divestiture, but Defendants and the acquirer can negotiate a longer period by private contract.
Paragraph IV.B of the proposed Final Judgment requires Defendants to transfer all contracts, agreements, and relationships to the acquirer and must make best efforts to assign or otherwise transfer contracts or agreements that require the consent of another party before assignment or other transfer.
The proposed Final Judgment requires Defendants to provide certain transition services to maintain the viability and competitiveness of the Divestiture Assets during the transition to the acquirer. Paragraph IV.L of the proposed Final Judgment requires Defendants, at the acquirer's option, to enter into transition services agreements (i) for a period of up to ninety (90) calendar days, for cross-docking and warehousing support, access to Divestiture Assets in Defendants' facilities, marketing, information technology services, human resources, accounting, payroll, accounts payable, accounts receivable, and revenue recognition, and export control, and (ii) for a period of up to twelve (12) months, for customer service and support. The acquirer may terminate the transition services agreement, or any portion of it, without cost or penalty at any time upon thirty (30) calendar days' written notice to Defendants. The paragraph further provides that the United States, in its sole discretion, may approve one or more extensions of this transition services agreement for a total of up to an additional ninety (90) days and that any amendments to or modifications of any provisions of a transition services agreement are subject to approval by the United States in its sole discretion. Paragraph IV.L also provides that employees of Defendants tasked with supporting this agreement must not share any competitively sensitive information of the acquirer with any other employee of Defendants, unless such sharing is for the sole purpose of providing transition services to the acquirer.
If Defendants do not accomplish the divestiture within the period prescribed in Paragraph IV.A of the proposed Final Judgment, Section V of the proposed Final Judgment provides that the Court will appoint a divestiture trustee selected by the United States to effect the divestiture. If a divestiture trustee is appointed, the proposed Final Judgment provides that Defendants must pay all costs and expenses of the trustee. The divestiture trustee's commission must be structured so as to provide an incentive for the trustee based on the price obtained and the speed with which the divestiture is accomplished. After the divestiture trustee's appointment becomes effective, the trustee must provide monthly reports to the United States setting forth his or her efforts to accomplish the divestiture. If the divestiture has not been accomplished within one hundred and eighty (180) days of the divestiture trustee's appointment, the United States may make recommendations to the Court, which will enter such orders as appropriate, in order to carry out the purpose of the Final Judgment, including by extending the trust or the term of the divestiture trustee's appointment.
Paragraph XV.A of the proposed Final Judgment provides that, if at any time during the five (5) year period following entry of the Final Judgment, the United States determines at its sole discretion that the Final Judgment has failed to fully redress the violations alleged in the Complaint, then the United States may re-open the proceeding to seek additional relief, including divestiture of additional assets.
[top] Paragraph XV.B of the proposed Final Judgment provides that the United States retains and reserves all rights to enforce the Final Judgment, including the right to seek an order of contempt from the Court. Under the terms of this paragraph, Defendants have agreed that in any civil contempt action, any motion to show cause, or any similar action brought by the United States
Paragraph XV.C of the proposed Final Judgment provides additional clarification regarding the interpretation of the provisions of the proposed Final Judgment. The proposed Final Judgment is intended to remedy the loss of competition the United States alleges would otherwise be harmed by the transaction. Defendants agree that they will abide by the proposed Final Judgment and that they may be held in contempt of the Court for failing to comply with any provision of the proposed Final Judgment that is stated specifically and in reasonable detail, as interpreted in light of this procompetitive purpose.
Paragraph XV.D of the proposed Final Judgment provides that if the Court finds in an enforcement proceeding that a Defendant has violated the Final Judgment, the United States may apply to the Court for an extension of the Final Judgment, together with such other relief as may be appropriate. In addition, to compensate American taxpayers for any costs associated with investigating and enforcing violations of the Final Judgment, Paragraph XV.D provides that, in any successful effort by the United States to enforce the Final Judgment against a Defendant, whether litigated or resolved before litigation, the Defendant must reimburse the United States for attorneys' fees, experts' fees, and other costs incurred in connection with that effort to enforce this Final Judgment, including the investigation of the potential violation.
Paragraph XV.E of the proposed Final Judgment states that the United States may file an action against a Defendant for violating the Final Judgment for up to four (4) years after the Final Judgment has expired or been terminated. This provision is meant to address circumstances such as when evidence that a violation of the Final Judgment occurred during the term of the Final Judgment is not discovered until after the Final Judgment has expired or been terminated or when there is not sufficient time for the United States to complete an investigation of an alleged violation until after the Final Judgment has expired or been terminated. This provision, therefore, makes clear that, for four (4) years after the Final Judgment has expired or been terminated, the United States may still challenge a violation that occurred during the term of the Final Judgment.
Finally, Section XVI of the proposed Final Judgment provides that the Final Judgment will expire ten (10) years from the date of its entry, except that after five (5) years from the date of its entry, the Final Judgment may be terminated upon notice by the United States to the Court and Defendants that the divestiture has been completed and continuation of the Final Judgment is no longer necessary or in the public interest.
IV. Remedies Available to Potential Private Plaintiffs
Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any person who has been injured as a result of conduct prohibited by the antitrust laws may bring suit in federal court to recover three times the damages the person has suffered, as well as costs and reasonable attorneys' fees. Entry of the proposed Final Judgment neither impairs nor assists the bringing of any private antitrust damage action. Under the provisions of Section 5(a) of the Clayton Act, 15 U.S.C. 16(a), the proposed Final Judgment has no prima facie effect in any subsequent private lawsuit that may be brought against Defendants.
V. Procedures Available for Modification of the Proposed Final Judgment
The United States and Defendants have stipulated that the proposed Final Judgment may be entered by the Court after compliance with the provisions of the APPA, provided that the United States has not withdrawn its consent. The APPA conditions entry upon the Court's determination that the proposed Final Judgment is in the public interest.
The APPA provides a period of at least sixty (60) days preceding the effective date of the proposed Final Judgment within which any person may submit to the United States written comments regarding the proposed Final Judgment. Any person who wishes to comment should do so within sixty (60) days of the date of publication of this Competitive Impact Statement in the Federal Register , or within sixty (60) days of the first date of publication in a newspaper of the summary of this Competitive Impact Statement, whichever is later. All comments received during this period will be considered by the U.S. Department of Justice, which remains free to withdraw its consent to the proposed Final Judgment at any time before the Court's entry of the Final Judgment. The comments and the response of the United States will be filed with the Court. In addition, the comments and the United States' responses will be published in the Federal Register unless the Court agrees that the United States instead may publish them on the U.S. Department of Justice, Antitrust Division's internet website.
Written comments should be submitted in English to: Jared Hughes, Assistant Chief, Media, Entertainment and Communications Section, Antitrust Division, United States Department of Justice, 450 Fifth Street NW, Suite 7000, Washington, DC 20530.
The proposed Final Judgment provides that the Court retains jurisdiction over this action, and the parties may apply to the Court for any order necessary or appropriate for the modification, interpretation, or enforcement of the Final Judgment.
VI. Alternatives to the Proposed Final Judgment
As an alternative to the proposed Final Judgment, the United States considered a full trial on the merits against Defendants. The United States could have continued the litigation and sought preliminary and permanent injunctions against Keysight's acquisition of Spirent. Under the circumstances present here, however, the United States concludes that entry of the proposed Final Judgment is in the public interest insofar as it avoids the time, expense, and uncertainty of a full trial on the merits.
VII. Standard of Review Under the APPA for the Proposed Final Judgment
Under the Clayton Act and APPA, proposed Final Judgments, or "consent decrees," in antitrust cases brought by the United States are subject to a sixty (60) day comment period, after which the Court shall determine whether entry of the proposed Final Judgment "is in the public interest." 15 U.S.C. 16(e)(1). In making that determination, the Court, in accordance with the statute as amended in 2004, is required to consider:
(A) the competitive impact of such judgment, including termination of alleged violations, provisions for enforcement and modification, duration of relief sought, anticipated effects of alternative remedies actually considered, whether its terms are ambiguous, and any other competitive considerations bearing upon the adequacy of such judgment that the court deems necessary to a determination of whether the consent judgment is in the public interest; and
[top] (B) the impact of entry of such judgment upon competition in the relevant market or
15 U.S.C. 16(e)(1)(A) & (B). In considering these statutory factors, the Court's inquiry is necessarily a limited one as the government is entitled to "broad discretion to settle with the defendant within the reaches of the public interest." United States v. Microsoft Corp., 56 F.3d 1448, 1461 (D.C. Cir. 1995); United States v. U.S. Airways Grp., Inc., 38 F. Supp. 3d 69, 75 (D.D.C. 2014) (explaining that the "court's inquiry is limited" in Tunney Act settlements); United States v. InBev N.V./S.A., No. 08-1965 (JR), 2009 U.S. Dist. LEXIS 84787, at *3 (D.D.C. Aug. 11, 2009) (noting that a court's review of a proposed Final Judgment is limited and only inquires "into whether the government's determination that the proposed remedies will cure the antitrust violations alleged in the complaint was reasonable, and whether the mechanisms to enforce the final judgment are clear and manageable").
As the U.S. Court of Appeals for the District of Columbia Circuit has held, under the APPA a court considers, among other things, the relationship between the remedy secured and the specific allegations in the government's Complaint, whether the proposed Final Judgment is sufficiently clear, whether its enforcement mechanisms are sufficient, and whether it may positively harm third parties. See Microsoft, 56 F.3d at 1458-62. With respect to the adequacy of the relief secured by the proposed Final Judgment, a court may not "make de novo determination of facts and issues." United States v. W. Elec. Co., 993 F.2d 1572, 1577 (D.C. Cir. 1993) (quotation marks omitted); see also Microsoft, 56 F.3d at 1460-62; United States v. Alcoa, Inc., 152 F. Supp. 2d 37, 40 (D.D.C. 2001); United States v. Enova Corp., 107 F. Supp. 2d 10, 16 (D.D.C. 2000); InBev, 2009 U.S. Dist. LEXIS 84787, at *3. Instead, "[t]he balancing of competing social and political interests affected by a proposed antitrust decree must be left, in the first instance, to the discretion of the Attorney General." W. Elec. Co., 993 F.2d at 1577 (quotation marks omitted). "The court should also bear in mind the flexibility of the public interest inquiry: the court's function is not to determine whether the resulting array of rights and liabilities is the one that will best serve society, but only to confirm that the resulting settlement is within the reaches of the public interest." Microsoft, 56 F.3d at 1460 (quotation marks omitted); see also United States v. Deutsche Telekom AG, No. 19-2232 (TJK), 2020 WL 1873555, at *7 (D.D.C. Apr. 14, 2020). More demanding requirements would "have enormous practical consequences for the government's ability to negotiate future settlements," contrary to congressional intent. Microsoft, 56 F.3d at 1456. "The Tunney Act was not intended to create a disincentive to the use of the consent decree." Id.
The United States' predictions about the efficacy of the remedy are to be afforded deference by the Court. See, e.g., Microsoft, 56 F.3d at 1461 (recognizing courts should give "due respect to the Justice Department's . . . view of the nature of its case"); United States v. Iron Mountain, Inc., 217 F. Supp. 3d 146, 152-53 (D.D.C. 2016) ("In evaluating objections to settlement agreements under the Tunney Act, a court must be mindful that [t]he government need not prove that the settlements will perfectly remedy the alleged antitrust harms[;] it need only provide a factual basis for concluding that the settlements are reasonably adequate remedies for the alleged harms." (internal citations omitted)); United States v. Republic Servs., Inc., 723 F. Supp. 2d 157, 160 (D.D.C. 2010) (noting "the deferential review to which the government's proposed remedy is accorded"); United States v. Archer-Daniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) ("A district court must accord due respect to the government's prediction as to the effect of proposed remedies, its perception of the market structure, and its view of the nature of the case."). The ultimate question is whether "the remedies [obtained by the Final Judgment are] so inconsonant with the allegations charged as to fall outside of the `reaches of the public interest.'?" Microsoft, 56 F.3d at 1461 ( quoting W. Elec. Co., 900 F.2d at 309).
Moreover, the Court's role under the APPA is limited to reviewing the remedy in relationship to the violations that the United States has alleged in its Complaint, and does not authorize the Court to "construct [its] own hypothetical case and then evaluate the decree against that case." Microsoft, 56 F.3d at 1459; see also U.S. Airways, 38 F. Supp. 3d at 75 (noting that the court must simply determine whether there is a factual foundation for the government's decisions such that its conclusions regarding the proposed settlements are reasonable); InBev, 2009 U.S. Dist. LEXIS 84787, at *20 ("[T]he `public interest' is not to be measured by comparing the violations alleged in the complaint against those the court believes could have, or even should have, been alleged"). Because the "court's authority to review the decree depends entirely on the government's exercising its prosecutorial discretion by bringing a case in the first place," it follows that "the court is only authorized to review the decree itself," and not to "effectively redraft the complaint" to inquire into other matters that the United States did not pursue. Microsoft, 56 F.3d at 1459-60.
In its 2004 amendments to the APPA, Congress made clear its intent to preserve the practical benefits of using judgments proposed by the United States in antitrust enforcement, Public Law 108-237 §?221, and added the unambiguous instruction that "[n]othing in this section shall be construed to require the court to conduct an evidentiary hearing or to require the court to permit anyone to intervene." 15 U.S.C. 16(e)(2); see also U.S. Airways, 38 F. Supp. 3d at 76 (indicating that a court is not required to hold an evidentiary hearing or to permit intervenors as part of its review under the Tunney Act). This language explicitly wrote into the statute what Congress intended when it first enacted the Tunney Act in 1974. As Senator Tunney explained: "[t]he court is nowhere compelled to go to trial or to engage in extended proceedings which might have the effect of vitiating the benefits of prompt and less costly settlement through the consent decree process." 119 Cong. Rec. 24,598 (1973) (statement of Sen. Tunney). "A court can make its public interest determination based on the competitive impact statement and response to public comments alone." U.S. Airways, 38 F. Supp. 3d at 76 (citing Enova Corp., 107 F. Supp. 2d at 17).
VIII. Determinative Documents
There are no determinative materials or documents within the meaning of the APPA that were considered by the United States in formulating the proposed Final Judgment.
Dated: June 2, 2025.
Respectfully submitted,
For Plaintiff United States of America:
Carl Willner (D.C. Bar #412841),
Carmel Arikat (D.C. Bar #1018208),
Curtis Strong (D.C. Bar #1005093),
U.S. Department of Justice, Antitrust Division, Media, Entertainment, and Communications Section, 450 Fifth Street NW, Suite 7000, Washington, DC 20530, Telephone: 202-514-5813.
[FR Doc. 2025-10536 Filed 6-11-25; 8:45 am]
BILLING CODE 4410-11-P