In October 2023, the Federal Trade Commission (FTC) withdrew its administrative complaint challenging the 2018 merger of Axon Enterprise Inc. and VieVu, LLC, the two leading manufacturers of body-worn camera systems for use by large police departments, citing “protracted and ongoing delays” caused by Axon’s countersuit, in which Axon challenged the constitutionality of the FTC itself.
The case was closely followed for its potential legal implications, but the economic perspective is also an interesting one. The FTC had alleged that the parties were close competitors in a highly concentrated market, and the merger surpassed concentration thresholds that would have deemed it anticompetitive under the 2010 Horizontal Merger Guidelines that were in force at the time. Despite that, the merger was allowed to proceed, providing a unique opportunity to evaluate the actual effects of the kind of merger that enforcement agencies would typically prohibit.
In “Evidence on the Impact of the Axon-VieVu Merger,” authors Randy Chugh, Eric Emch, Mico Mao, and Matt Wohlleben examine the current state of competition in this market. Their results show that (1) Axon solidified its dominance of the market for BWC systems following the merger, (2) smaller rivals have not replaced the competition eliminated by the merger, and (3) the price of BWC systems has increased since the merger.
