Axon's VieVu Acquisition Reduced Competition: FTC

(RTTNews) - The Federal Trade Commission (FTC) challenged the consummated merger of two of the leading suppliers of body-worn camera system suppliers to large metropolitan police departments across the United States as it reduced competition in an already concentrated market.

The competition regulator issued an administrative complaint against the merger of Axon Enterprise, Inc. with its competitor VieVu LLC, which was completed in May 2018. It voted unanimously at 5-0 to issue the administrative complaint. The administrative trial is scheduled to begin on May 19, 2020.

"Competition not only keeps prices down, but it drives innovation that makes products better," said Ian Conner, Director of the FTC's Bureau of Competition.

The two companies supply camera to hundreds of law enforcement agencies including New York City Police Department, Miami-Dade Police Department, Oakland Police Department, Phoenix Police Department and Aurora, CO Police Department.

Axon and its closest rival VieVu competed against each other to sell the camera systems to large metropolitan police departments prior to the merger. This resulted in substantially lower prices and innovative products for the buyers.

The regulator noted that the merger will eliminate direct and substantial competition in price and innovation for Axon as a supplier. The merger has also resulted in the removal of VieVu as a bidder for new contracts and allowed Axon to impose substantial price increases, the FTC complaint says.

The complaint also states that Axon also entered into several long-term ancillary agreements, some of which are valid for more than a decade, with VieVu's former parent company, Safariland. These agreements barred Safariland from competing with Axon now and in the future on all of Axon's products, which would substantially lessen potential competition.

Meanwhile, Axon has sued the FTC for unfairly targeting since the completion of its merger with VieVu. The FTC is said to have initiated investigations against the deal in August 2018 itself. The reported 29-page complaint against the FTC's actions was filed in the U.S. District Court in Arizona on Friday.

The Federal Trade Commission works to promote competition, and protect and educate consumers.