A Los Angeles police officer wear an AXON body camera during the Immigrants Make America Great March to protest actions being taken by the Trump administration on February 18, 2017 in Los Angeles, California.
Getty ImagesNearly a decade ago, in August 2014, America was rocked by the police killing of Michael Brown, an unarmed 18-year-old Black man in Ferguson, Missouri. Local police, as was common nationwide at the time, lacked body-worn cameras. The incident galvanized an effort to expand police use of such cameras nationwide in hopes of bringing clarity to dynamic and dangerous law enforcement situations.
Since that time, one company, far more than any other, has capitalized on this demand for police accountability – eight states now require them – to become the nation’s largest manufacturer of body-worn cameras: Axon.
But now an alliance of cities is claiming that growth was ill-gotten. Baltimore, Maryland; Augusta, Maine; and Howell, New Jersey have sued Axon, alleging that the company has committed antitrust violations, abused its market power, and forced cities to pay exorbitant fees for a basic, but crucial piece of law enforcement tech.
Filed in federal court in New Jersey, the suit claims that the Arizona-based company formerly known as Taser International bought VieVu, one of its key competitors, to secure four major contracts that had eluded it: New York City, Oakland, Miami-Dade and Phoenix. Then, under its new Axon brand, it aggressively raised prices for clients that had few other options. Within a year, Axon’s body cam prices had risen 50 percent. By 2022, those prices had nearly tripled, reaching $490 per camera.
Meanwhile, the company pulled off a stunning land grab — 60 to 70 percent market share in North America, according to William Blair analyst Jonathan Ho. Axon’s market capitalization was $1.4 billion at the beginning of 2018; it is more than $22 billion today.
William Reiss, one of the cities’ attorneys, told Forbes his clients believe that they overpaid for the body cameras they bought and are getting worse quality devices, given that there is scant competition. And while he is currently working with just three cities, the proposed class-action lawsuit could conceivably represent every other jurisdiction that bought Axon cameras in recent years.
“Every dollar that [my clients] are overcharged is a dollar that they can’t spend on critical police items,” he said.
Pam Peterson, an Axon spokesperson, said in an email to Forbes that the company believes the lawsuit is “based in large part on unproven and dismissed allegations” and should be dismissed. “We compete with large, well-funded and highly respected companies, as well as numerous smaller companies relying on inexpensive camera technology,” she said. “Axon fights for and must earn every contract win and has successfully competed and won several open bid processes against robust competition.”
“The facts here look really dire for Axon.”
The company is expected to file its motion to dismiss in the coming weeks.
While there are other body cam manufacturers — Panasonic and Motorola, for example — they pale in comparison to Axon. In an April 10 investor note, Josh Reilly, an analyst at Needham & Co. wrote that out of the approximately 720,000 state and local law enforcement officers across the U.S., an estimated 70 percent have body cameras, and of those, fully half have a camera made by Axon.
In 2018, in Axon’s own annual report, it notes that “of the 69 largest metropolitan area police departments in the U.S., 46 are on the Axon network.” In the company’s 2022-2023 annual report, Axon states that it has a “relationship” with “over 95% of state and local law enforcement agencies in the United States.”
But under American antitrust law, dominant market positions, and even monopolies, are not per se illegal — anti-competitive behavior is. And that is what the states will have to prove.
Legal experts seem to think they have shot. “The facts here look really dire for Axon,” Albert Fox Cahn, the founder of the Surveillance Technology Oversight Project, an advocacy group in New York City, who previously worked as an antitrust lawyer, told Forbes.
Christine Bartholemew, a law professor at the University of Buffalo, and an expert in antitrust law, agreed, noting that the sharp rise in Axon’s prices is eyebrow-raising.
“The numbers that they have in the complaints put this in that danger realm, if proved up,” she told Forbes. If the cities are able to successfully argue their case, it could pose a significant financial threat to Axon. Antitrust law allows plaintiffs to recover triple damages. The lawsuit does not specify how much the plaintiffs believe that they overpaid, but the upward spike in Axon cam prices suggests it could be substantial.
That said, the lawsuit’s success is hardly a sure thing, and potentially a grueling uphill battle, one Axon has won before. In January 2020, the Federal Trade Commission sued Axon over its acquisition of VieVu, arguing that it would reduce competition in an already concentrated market. “The Commission is taking action to ensure that police officers have access to the cutting-edge products they need to do their job, and police departments benefit from the lower prices and innovative products that competition had provided before the acquisition,” the agency said in a press release at the time.
Axon responded by suing the FTC itself. The subsequent legal battle dragged on for more than three years before the FTC withdrew its complaint, saying that even if it were to win, doing so would be too costly, and would take too long.
Axon’s Peterson touted the FTC’s retreat as a victory and claimed that it shows that the case’s “underlying assumptions had proven false.” But the truth is that no court has evaluated the legal heart of the case — if the VieVu acquisition was anticompetitive. Now Baltimore, Augusta, and Howell are going to force the issue. And they are just three of Axon’s tens of thousands of markets nationwide.
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