FTC Dismisses Complaint Against Axon After Supreme Court Sides With Company
While the FTC's decision closes the Axon-Vievu acquisition and boosts Axon's position in the body camera market, Axon still faces regulatory risks as federal agencies will likely closely scrutinize Axon's future practices.
In this report, we examine the impact of the now-confirmed Vievu acquisition on Axon's financials, the procedural history of the FTC's complaint and Axon's lawsuit, the FTC's reasons for dismissing the action, and the outlook for Axon.
The FTC's dismissal comes after the Supreme Court sided with Axon in April 2023 and ruled that a federal district court could review the legality of the FTC's antitrust complaint, which Axon first petitioned the Supreme Court to consider in 2021.
Executive *******
- **********:
- *** ***'* ********* ******** ****'* *********** of *****, ******** *** *******'* **** camera ********.
- "**** ****" ****** ***** *** $*** million ** ****, * ***.*% ******** from **** *** * ******** ****** growth **** ** **.*%.
- ****'* "******** *** ********" ****** - encompassing **** ******* *** ******* ******* - *********** **.*% ** ***** **** revenue, ** **** **.*% ** ****.
- ***** ******** ***** ~$* ******* ** yearly ******* ** ****. **** *** not ********* *****'* ******** ** ****** 10-K ** **-* *** *******.
- Procedural **********:
- *** *** ******* **** ****'* ***** acquisition ******** ********* ****. **** ****** back ** *********** *** ************** ******** of *** ************ **********.
- *** ******* ***** ***** **** **** in ***** **** *** ***** **** a ******* ******** ***** ***** ****** the ***'* **********.
- FTC ***** *********:
- *** ***, ****** ****** ********* *** fears ** * ********* **********, ********* the ********* ** ******* *, ****.
- ****'* ******* ***** *********** ***** ** the ******. *** ***'* ********* ****** potential *********** ********, ********** ** ***** of ****'* ***** ** ******** *** Arizona *******.
- *******:
- **** ***** ***** *** **** ** future *** ** *** *******.
- ***, *** ***, *** ******** ** a ***/*** **** ********** *** *******'* market ******** ** *** **** ****** space *** ********* *** ***'* ******** adjudication *********.
Financial ************ - ***** ******** ***** ~$** ****** *******
*** **** ********* *********** ** *** FTC's ******** ** **** *** ********* complaint ** **** *** ***** *********** is ******. *** *********** *** *********** to ****'* ****** ******** ** *** body ****** ******.
**** *** *** **** ***** ** sales - (*) **** **** *** (2) **** *******. ** *** ***** of *** *****, **'* *** ******** player ** (*). ****** *** ****** deployed ****** ******** ****** ***********, *** instance.
**** *** ******* * ***** ****** in (*) ****** ** ******** *****. It **** $** ******* ** *** "Axon ****" ******* ** **** *** held ********* **** ****** *********** **** ** *** ****** ******' ** major ******. ***** *** * **********, ******** ***** **** *********- ********* **** *** **** - and ****** ***** ***** *****. (****** Vievu's ***-*********** ********** ****'* *********, ****** ** **** *** ********** **** ***** *********** *% ** Axon’s ****** ********* ******* ** $***.* million, *********** ** $*.* *******. **** likely ***** * ***** ******** ** Vievu's ***-*********** ****** *******, *********'* ************** *** ***** ***** *** *********** was "*****[***] ***** ********* *** *******[***] its *********’ ****-**** ****** ******** ******* disruption" ****** **** ********* *****'* ********.)
****'* **** ****** ***** ************* ************* ***** ** ******** *****. ***** ** **** **** ******* hit $*** ******* ** ****, * 726.7% ******** **** **** ***** *** a ******** ****** ****** **** ** 52.6% **** **** *-**** ******. *** 'Software *** ********' ****** ** ****'* business - ***** *********** **** ******* and ******* ********/********** - *************.*% ** ***** **** ******* ** 2022, ** ******.*% ** ****. ****** *** **** ** **** than **% ** ***** **** *******.
****'* **** ****** ****** ** ****** due ** *** *******'* ***** ******* focusing **** ********* ** **** **** of *** ********, *** *** ***** acquisition *** ******. ********** ***** ~$* ******* ** ****** revenue** ****, ****** **** *** *** disclosed ***** ******** ** ****** **-* or **-* *** *******. **** **** boasted ****** *** **************** *** ********* ********** ** ******** Vievu's ******** *********, **** **** ***** **** ****** ********** *********. ********* ***** ******* ** **** competitor *** ******** ****'* ***** ****.
****'* ****** ** **** ******* *** contributed ** *** *******'* *********** ******* growth ** *** **** * *****. Axon's ***** ************ ** ***%** **** ****, *** *** ******* is****** *** $* ******* ** ******* by ****.
Procedural **********
*** *** ******* ****** ** ************* after **** ******** ***** ** ****, alleging **** *** ******** *** **** violated ** ********* ****. *** ****** ultimately ******** **** **** ****** **** Vievu ** **** *** ************.**** *******, ****** **** ******** ** * "blank *****" *********** **** ***** ***** turn *****:
into * ******* '*****' ** **** ***** **** ****’* *** ************ ********—something that Vievu never was nor could be without impermissible government regulation of, and unwarranted interference in, a highly-competitive marketplace. [emphasis added]
*** *** ******** ******* ** *** threat, ******* **************** ********* ******* **** *** **********(*****'* ****** *******) ** ******* ****. The ********* ******* **** ** ****** from ***** ********.
************** *** ***'* *********** ******* ***** ** *******. ********* to ****, *** ***'* ********* *** procedures **** ****************. ****'* ********* ******** was **** *** *******'* *** ******* rights ******'* ** ********* ** ** FTC-adjudicated ******, ** ***** *** *** would *** ** ************, *****, ****, and ***********.
*** ******* ********** ******* ****** ***** ****. *** ***** ********** that ** *** *** **** ******* matter ************ ** ****** *** "**** of ************** ****** **** [******] ** raise" - ******, ******* *** ***'* adjudication ********* ** ****************. *** ***** Circuit ******** *** ******* *****'* *****.
***************** ******* ***** ** *** ****** States (******) ** **** **** ** hear ** ****** ** *** ***** Circuit's ********. ****** ****** ** ******* 2022 *********** *** ***** *******'* ********** ***** ****, ****** **** *** Arizona ***** *** **** ************ ** review *** ******** ** *** ***'* adjudication *********. *** **** *** ******** to *** ******* *****.
FTC ***** *********
** ******** ** ******'* ********, *** FTC ********* *** ********* ********* ******* Axon *** ********** ** ******* *, 2023.
** *** ******* * *********, *** FTC ***** **** *** ***** ***** the **** *********** *****'* *******. *** agency ***** **** *** *********** ** an ****-*********** **** **** *** ****** a ******** *** ********* ******* *********** needed ** **** ********** *** ****** costs.
*** *** **** **** **'* ********** the ********* ******* ** ****** *********. According ** *** ***, ******'* ***** may **** *** *** ******* ********** for *****, ******** ***-**** ***** ** an ****** ***** ********* *** ******* thinly ******.
Analysis ** *** ****
*** ***'* ********* ** **************. ** with *** ******* ******, *** ********* are *******. ********** *** **** ********* to * ****** **** **** *** risk ** ************ *** ****** ** other ********* ************** *** *******.
*** ***** ***** ** **** ** the ********. ****'* **** ******* *** FTC ****'* **** ********* *** ******** of *** ***'* ********* ********* ******* Axon *** **********. ** **** ********** the ************** ******** ** *** ***'* very ********* *** ************ **********. * ruling ******* *** *** - *****, while ********, *** ****** ******** - could **** *** *** * *********. It ****** ***** **** ****** *** FTC ** ****** *** ********** ********* and ** * ******-***** ******* ** its ************ *********. *** *** *** have ******* *** ***** **** *** high ** ******* ****** ******* ******* Axon.
******, **** *** ********* **** ** plans ** **** *** ******* *******. The *** *** **** ****, ** least *** ***.
*******
**** ***** ***** ********** *****. *** company's ********* *** ****** ***** ** the ********** ** *** ***, *** potentially **** *** *** (*** ***** federal ****** **** ******** ********* ****). As *** *** ***** ** *** dismissal, ** ***** ***** *** ***** acquisition ** ****-***********.
**'* ******** **** *** *** ***** rechallenge *** ******. *****, *** ****** has *** ********* *********** ******* * **** ** ********* actions ** ***** ** ****-***********, **** "***** ******," "***** ********," and "********* ******* *********." *** *** will ****** ******* ******* ****'* ****** practices, *** *** ******* ****** ******* cautiously. *** ****** ************ **** ****** be ******* ** *********** ********, ***. Working ** ****'* ***** ** **** the ******* ***** ***** ********* *** constitutional ******** ** *** ***'* ************ structure, ***** ***** *** *** *** down ** ******* *** ***** **********.
******* *********** ** **** *** *** could ********* *** ****/***** ******.****** ******** ****(***** ******* ******* **** ***** ******* with *** **** ******* *****) ***** only ** ******** *****, *** ***** is** ******* ** *********** *** *********** US *******. *** ***'* ************ ********** ****** wouldn't **** *** **** **** ** scrutiny **** *** ******. *** ***** proceed ******* ******* ****** ****** **** through ******** *************.
***, ** ***** *** ***, *** dismissal ** * ***/*** *** ****'* strong **** ****** ******** *** *** FTC's ******* ** ******** ****** *** operations.