Router Maker TP-Link Faces US Criminal Antitrust Probe

The US is conducting a criminal antitrust investigation into pricing strategies by TP-Link Systems Inc., a California-based router maker with links to China whose equipment now dominates the American market, according to people familiar with the matter.

 

Beyond pricing, a focus of the inquiry is also whether the company’s growing US market share represents a threat to national security, said the people, who asked not to be named discussing a confidential matter. The scrutiny began in late 2024 under the Biden administration and has continued under President Donald Trump.

 

US officials have in recent years been increasing their focus on risks presented by technology companies with a large US presence and ties to foreign adversaries such as China and Russia. In addition to the probe by prosecutors, the US Commerce Department is investigating whether TP-Link’s China ties pose an unacceptable risk to national security, Bloomberg News reported earlier.

 

Prosecutors in the Justice Department’s antitrust division are investigating whether TP-Link engaged in predatory pricing, according to the people. Such a pricing strategy involves selling goods below cost in order to gain market share before raising prices once competitors have either been hobbled or eliminated.

 

In addition to examining the company’s pricing practices, Justice Department officials are also scrutinizing the company’s corporate structure, the people said.

 

The antitrust enforcers are concerned that TP-Link’s pricing practices could hurt the ability of other companies that don’t present a potential national security threat to sell routers in the US market, the people said.

 

In a statement, TP-Link said it hadn’t received any inquiry from the Justice Department, but that it stands ready to cooperate fully if it does. The company also denied selling products below cost and said it maintains “a policy of transparency in our business practices, ensuring fair pricing for our valued customers.”

 

The Justice Department declined to comment.

 

Shares of rival Netgear Inc. jumped more than 10% and were up 8.3% at 12:05 p.m. in New York.

 

The DOJ hasn’t accused TP-Link or any of its executives of wrongdoing. Criminal antitrust probes can take years to complete and may not result in charges. The DOJ can fine companies as much as $100 million for criminal antitrust violations and individuals can face up to 10 years in prison and be fined as much as $1 million.

 

TP-Link last year completed a split into two separate entities, an American unit headquartered in Irvine, California, and a Chinese unit based in Shenzhen. The US-based entity being scrutinized by Justice and Commerce Department officials still has substantial operations in mainland China, Bloomberg News reported this month.

 

Before the split, TP-Link was the world’s largest provider of consumer Wi-Fi equipment, according to market research firm IDC. Its routers, which relay information from the internet to devices such as computers and smartphones, are widely sold through retailers such as Amazon.com Inc. and Best Buy, and can be found in homes and small businesses across the country.

 

TP-Link routers were among the various brands — including American ones — exploited by Chinese state-sponsored hackers who launched the massive Volt and Salt Typhoon attacks that targeted US critical infrastructure, US officials have said.

 

There’s no evidence that TP-Link was complicit in any of the attacks and the company has said that it hasn’t been able to verify how its devices were affected, if at all.

 

The Wall Street Journal earlier reported that the DOJ was investigating TP-Link for its pricing practices, but the criminal nature of the investigation and its national security concerns haven’t been previously disclosed.

 

The DOJ is also conducting a parallel civil investigation into the company’s pricing practices, the people said. Predatory pricing cases are rare and difficult to prove in court because a plaintiff must show that the company plans to recoup its losses by raising prices later on. As a result, such cases are usually brought as civil complaints, where the burden of proof is lower.

 

Under the Biden administration, the Justice Department sought to revive a practice of criminally prosecuting monopolization cases against companies and individuals. In March, Emma Burnham, director of criminal enforcement at the DOJ’s antitrust division, indicated the focus would continue under Trump.

 

That includes “everyday products we all rely on, as well as for vital goods and services the government needs to ensure our national security and provide critical infrastructure,” said Burnham, without mentioning any specific cases.