FTC Report Slams OEM Restrictions on Repair

It took the US Federal Trade Commission two years and an Act of Congress to barf up the conclusions from its Nix the Fix event. In the end, the FTC sent a strong message supporting repair.

Well, it took almost two years and an act of Congress to get the FTC to finally cough up its conclusions from Nixing the Fix, a 2019 conference it held to assess arguments for an against repair. In the end: it was worth the wait.

The U.S. government’s chief anti trust and consumer protection agency, the Federal Trade Commission on Thursday, came down hard on the side of a legal right to repair. The agency issued a 56 page report (PDF) stemming from a July, 2019 conference, Nixing the Fix, which examined restrictions put on repair by automobile manufacturers, electronics makers and others.

“There is scant evidence to support manufacturers’ justifications for repair restrictions.” - U.S. Federal Trade Commission

The bi-partisan Commission voted 4-0 to authorize staff to send the report to Congress, a strong show of report for the right to repair in an atmosphere that is more often characterized by deep partisan division.

The FTC said it identified “numerous types of repair restrictions” that have become common, from a reliance on adhesives in device assembly that make parts difficult to replace, to limiting the availability of spare parts, to sequestering software needed to diagnose problems with devices from owners and independent repair professionals.

Many Types of Restrictions

The report, addressed to the Committees on Appropriations of the House and Senate,” comes almost two years after the Commission sponsored an event, “Nixing the Fix: A Workshop on Repair Restrictions,” in Washington D.C. to investigate reports of manufacturers unfairly restricting repair of devices, in violation of federal laws such as the Magnuson-Moss Warranty Act.

It was issued in response to a directive from Congress to report out on the findings of the agency’s review of how manufacturers limit repairs and is based on responses to the Commission’s requests for public comments and empirical research issued in connection with the July 2019 workshop. 

The FTC identified a number of different restrictions on repair that are common across industries. Manufacturers refuse to make parts, repair manuals and diagnostic tools available. They design products to make repairs impossible or less safe. Manufacturers “disparage” non-OEM parts and independent repair as being of lower quality. And, critically, they employ “software locks, Digital Rights Management and Technical Protection Measures; and End User License Agreements” (EULAs) to restrict the ability to repair devices. In the case of automobiles, the report specifically mentions the use of “telematics systems” to cordon off repair and maintenance data from owners and independent repair shops.

The report takes aim at each of these restrictions in turn. On the critical argument that repairs pose a risk of intellectual property theft, the FTC notes that “in many
instances intellectual property rights do not appear to present an insurmountable obstacle to repair.” Existing Federal Copyright Law, for example, provides that an
owner or lessee of a machine may make a copy of a computer program for purposes of maintenance or repair. The FTC already notes that manufacturers already share that copyrighted material with authorized repair centers, making any assertion of trade secret protection unlikely to withstand legal scrutiny.

No Evidence To Justify Restrictions

Most damning: the FTC said that “there is scant evidence to support manufacturers’ justifications for repair restrictions.” The report also debunks fatuous arguments by device makers that cyber security concerns necessitate limits on access to owners and independent repair professionals.

“The record contains no empirical evidence to suggest that independent repair shops are more or less likely than authorized repair shops to compromise or misuse customer data,” the report concludes. “Furthermore, although access to certain embedded software could introduce new security risks, repair advocates note that they only seek diagnostics and firmware patches.”

Repair a safety risk? We got…nuthin’.

On the ever-potent issue of “safety,” the FTC noted that manufacturers failed to present any evidence that repairs by individual owners or independent repair shops posed a safety risk. Pro- manufacturer groups like CompTIA, the National Association of Manufacturers (NAM) and AHAM (the Association of Home Appliance Makers) have repeatedly warned, in dire terms, of the dangers posed by consumer repair including exploding lithium ion batteries, discharging capacitors in microwave ovens and more.

“Some of the safety considerations cited give pause,” FTC said. Upon closer review, “manufacturers provided no data to support their argument that injuries are tied to repairs performed by consumers or independent repair,” aside from a single incident of thermal runaway occurring in Australia in 2011. This, despite the fact that the FTC specifically asked for data concerning “[t]he risks posed by repairs made by consumers or independent repair shops.”

And despite scare-em campaigns like that conducted by automakers in opposition to Massachusetts expanded automobile right to repair law last year, manufacturers “failed provided factual support for their statements that authorized repair persons are more careful or that individuals or independent repair shops fail to take appropriate safety precautions, or that independent repair workers who enter homes pose more of a safety risk to consumers than authorized repair workers.”

“Everything that OEMs and their lobbyists trot out in opposition has been debunked in this report,” said Gay Gordon-Byrne of The Repair Association.

Hope for Consumer Advocates

The report is a major victory - if a symbolic one - for proponents of the right to repair.

"This report makes our job working with legislators so much easier,” wrote Gordon-Byrne of The Repair Association.  “I couldn't have asked for a more positive report. "

“The bipartisan, unanimous report is yet another indication that Right to Repair isn't a partisan idea, but rather common sense,” said Nathan Proctor of US PIRG in a statement. “People need to fix things, and manufacturers’ behavior toward repair is damaging and unacceptable. The FTC report strongly supports our argument that there is no good reason for companies to keep blocking repair access.”

“I'm appreciative that the FTC has signaled its willingness to work with state and federal lawmakers to help ensure that consumers have the right to repair their own products.”

“This is a great step in the right direction,” said iFixit CEO Kyle Wiens in a statement. “The bi-partisan report shows that FTC knows that the market has not regulated itself, and is committing to real action.”

Wiens, whose site is the largest repair web site on the Internet, testified at the Nixing the Fix event and said he was glad to see the FTC “acknowledge the scope of the problem, and the real harm to consumers. We’re also happy to see the FTC’s pledge to undertake enforcement and regulatory solutions to repair restrictions, and fully support them in doing so—these actions are long overdue.”

What’s Next…

The FTC laid out a number of possible solutions for the problems it identified in accessing repair. The most straightforward is simply for the Agency to do its job: enforcing existing federal laws like the Magnusson Moss Warranty Act that prevent illegal “tying” of products with after-purchase services or parts. The agency noted that information submitted by PIRG and others “raise serious concerns about the extent to which manufacturers are complying with the (Magnusson-Moss Act).”

A more potent response by the FTC would be a “rule making” - essentially a new declaration - that “certain types of repair restrictions” are illegal. That’s a much more complicated process and would involve revising existing interpretations of federal laws like the MMWA to make clear that certain types of repair restrictions that have become common are violations of federal law.

In addition, the FTC notes that industry self regulation is a possibility. The auto industry, for example, signed a memorandum of understanding following passage of an automobile right to repair law in Massachusetts in 2013 that, essentially, nationalized the state law.

However, automobiles are a discrete industry with a small number of players, making that kind of collaboration and coordination possible. Forging a cross industry agreement covering the endless variety of electronic devices, appliances, machinery, agricultural equipment and more that require repair and maintenance would be a heavy lift, FTC notes.

Another solution: new laws. The FTC notes that the EU has recently implemented a law requiring appliance makers to make parts and information available for certain classes of home appliances. France, also, has implemented a consumer “repair-ability index” that rates consumer electronics including smart phones based on how easy they are to repair. (We wrote about that -and how products by Apple and Microsoft don’t score well- here.) Similar laws could be introduced at the federal level here, too.

Already, half the states have introduced at least one right to repair bill this session, though many have fallen victim to industry lobbying. “I think legislators will be much more confident that they are doing the right thing by moving these bills into law,” wrote The Repair Association’s Gay Gordon-Byrne.

Still, repair advocates say the direction from FTC is encouraging. “I hope the FTC will act quickly on the steps they have identified,” wrote Proctor of PIRG. “After their 2019 Nixing the Fix workshop, it took almost two years for the FTC to report back; we hope that taking action to protect consumers’ right to repair happens much faster this time. “