the Federal Trade Commission

“ B.⁠Safety Manufacturers argue that repair restrictions protect repair workers and consumers from injuries that could result from fixing a product or using an improperly repaired product. According to manufacturers, safety risks are mitigated when repairs are performed by authorized repair persons because their contracts with such persons ensure that they have been properly trained and “have the necessary skills to safely and reliably repair products to OEM specifications and standards with OEM-quality parts.” ”

“ Thus, it is sometimes appropriate to analyze competition in a separate relevant market comprising the aftermarket.
But in many situations, application of general principles of market definition leads to a conclusion that a relevant market is not limited to the product of a single manufacturer, which is consistent with the Supreme Court’s discussion of the issue. Rather, relevant product markets typically include the products of multiple manufacturers. [67] In a broader market, a single manufacturer’s market share may not be sufficient to establish monopoly power in the relevant market. ”

“ The Repair Association’s Gordon-Byrne stated at the Workshop that “right to repair allows for competition. It doesn’t guarantee anyone will win. It doesn’t guarantee that a lousy repair shop will stay in business, and it doesn’t mean that a lousy dealership will stay in business. It just means opportunity.” [243]
The submissions to the docket and discussion at the Workshop catalogued a variety of benefits independent repair provides to consumers, including access to local and timely repair, [244] competition in the cost of repairs, and access to repairs that manufacturers do not offer. ”

“ A manufacturer’s explanations for aftermarket restrictions are almost always relevant to a court’s assessment of the overall competitive impact of a particular practice. [37] For example, manufacturers may assert that restrictions on competition in aftermarkets are necessary for privacy, data security, efficient design, manufacture, distribution, and safety reasons, and are thus procompetitive. Manufacturers may specifically restrict the options of consumers to repair a product, based on certain asserted explanations, such as enhancing efficiency ”

“ Repair advocates argue that the assertion of copyright, trademark, and patent rights impedes independent repair. As explained below, at present, the assertion of IP rights does not appear to be a significant impediment to independent repair.
Manufacturers of products with embedded software rely on copyright law to protect their code from being copied. Some manufacturers also secure design or utility patents for products they offer or for their component parts. Manufacturers may also invoke copyright or trade secret law to prevent the public disclosure of their repair protocols and manuals. ”

“ In addition, Sarah Faye Pierce from AHAM stated that unauthorized repair personnel may be untrained and uncertified and thus “may not understand how to properly repair the product to ensure it continues to meet or exceed the safety standards, particularly, a connected product, which then raises cybersecurity issues. All of this puts consumers in jeopardy. A product that once was safe could be rendered unsafe by an improper repair or unintentional use of a counterfeit part.” ”

“ Second, according to Vermont State Senator Pearson, manufacturers’ safety arguments are difficult to square with the experience of repair in the automotive sector:
The security and safety issues we heard earlier today were similar to what we heard during the [Vermont legislative] task force. And to me, the arguments are largely bogus, and they fall apart. When we think about motor vehicles, I think we would all agree an automobile is one of the more dangerous products that we own and we control. ”

“ The pandemic has exacerbated the effects of repair restrictions on consumers. As noted by Pew Research, “The pandemic has made living without a computer harder than ever. Employees are working remotely, kids are going to school via laptop, and grandparents are visiting with their grandkids on screens. At the same time, the pandemic has made it harder to get broken devices fixed, as many big chain stores have ceased offering on-site repairs. As a result, people have been forced to send their devices to authorized repair facilities—often waiting weeks for them to be returned.” ”

“ They assert that any requirement that a company must make available patented replacement parts for repair would be contrary to the statutorily protected right of a patent holder to exclude others from making, using, or selling their patented invention. ”

“ While the anti-tying provision gives consumers the right to make repairs on their own or through an independent repair shop without voiding a product’s warranty, repair restrictions have made it difficult for consumers to exercise this right. Although manufacturers have offered numerous explanations for their repair restrictions, the majority are not supported by the record.
The auto industry has shown that in certain contexts, self-regulation can significantly increase consumers’ repair options. But other industries have not adopted similar self-regulation. ”

“ At what price point do consumers view a product as single use and disposable versus a product that they anticipate should be repairable? Likewise, as to the appropriate duration for repair rights, how long do consumers expect the product to last? While individuals may have different views on these issues, self-regulatory or legislative bodies can strive to create thresholds based on the views of reasonable consumers. ↑ On the other hand, requiring manufacturers to maintain a stock of replacement parts for a specific duration could possibly chill innovation. ”

“ For example, an illegal tying claim might allege that a manufacturer unlawfully tied the availability of parts to the purchase of its repair service.
Other scenarios describe different types of conduct that may harm competition when adopted by a firm with market power. For instance, a manufacturer with market power that has refused to provide consumers or aftermarket service providers with key inputs (such as parts, manuals, or diagnostic software and tools) may be subject to antitrust liability for maintaining its monopoly, if the effect of such conduct is to harm competition. ”

“ The repercussions not only jeopardize the life of the product but may also leave the consumer worse off than before either with a new malfunction or a product rendered unsafe due to a repair conducted improperly or with the wrong parts. ”

“ Creating a price threshold that is too low could impose significant burdens on manufacturers of products that are designed for single use or are unlikely to be repaired because of their low cost. As the CTA’s Walter Alcorn noted at the Workshop, some consumer electronic products are so inexpensive that nobody would expect to be able to fix them:
For example, these days you can go into a gas station and buy a cable to basically attach your iPhone to the car. ”

“ According to right to repair advocates, however, many independent repair shops do not have access to replacement parts, diagnostics, and other resources that would enable them to complete the repairs in a cost-effective manner. [219]
For example, right to repair advocates maintain that where non-manufacturer replacement parts do not exist or their use is not feasible (i.e., because the product will no longer function if a non-OEM part is used) , manufacturers have effective monopolies on the repair of their product, allowing for repair costs to be more expensive than they could or should be. ”

“ Like the CTA, several organizations representing manufacturers stated that manufacturer repair restrictions do not contribute to e-waste because manufacturers have implemented protocols and procedures to reduce e-waste. Specifically, CompTIA, citing a Rochester Institute of Technology study and a 2016 EPA report, stated that e-waste is in a period of steep decline because manufacturers have developed robust policies and programs to ensure that they are continuously improving the sustainability of their products for their whole lifecycle. ”

“ For example, if a single component of a computer’s motherboard breaks, and a consumer determines that they want to attempt to replace that single component, the manufacturer would be required to make such a component available to consumers or independent repairers so long as it made the components available to its authorized or affiliated repairers. ”

“ Individuals and independent repair shops, manufacturers assert, are unlikely to be aware of the dangers inherent in some repairs and may be injured as a result. For instance, GE Appliances explained that an untrained person attempting to repair a microwave oven could be injured because, “internal microwave oven capacitors can discharge current even when not energized because they retain a powerful charge for some time even after unplugged.” ”

“ Other tactics described by commenters involve allegations of potentially exclusionary conduct, such as making products difficult or impossible to disassemble, in order to maintain market position and exclude aftermarket competitors, or the anti-competitive assertion of patent rights and enforcement of trademarks by manufacturers to restrict repairs not authorized by OEMs. Moreover, the use of embedded software that forces consumers to have the maintenance and repair of their products performed by the manufacturers’ authorized service networks may also raise competition issues. ”

“ For instance, some manufacturers have asserted that product designs that hamper ISO or consumer repair may prevent injuries while conducting repairs that involve certain dangers, like replacing certain kinds of batteries. Manufacturers also often assert safety and reputational concerns with non-authorized replacement parts or repair services. ”

“ Gay Gordon-Byrne of the Repair Association also noted that, “taking an alternator out of a car and putting it up on a hoist and dropping it on my foot is pretty dangerous” compared to opening up the back of a computer and putting in a new motherboard or replacing a screen. [150] The automotive sector demonstrates that consumers and independent repair shops are able to repair cars every day even though cars are a diverse group of complex machines that contain gasoline and battery acid and have hundreds of moving parts. ”

“ Furthermore, some courts have found little room to impose antitrust liability for a unilateral refusal to deal when intellectual property rights such as patent or copyright protect the aftermarket goods. ”

“ The Auto Care Association noted in its submission that 70–75% of consumers use independent repair shops due mostly to trust, convenience, and price. [207]
In addition, repair providers and advocates question the value of OEM repairer certifications. For example, Workshop panelist Jennifer Larsen stated that although her business’s technicians are not certified by any one OEM, they “go to training like certified technicians.” She also noted that “any good business owner who wants to keep their brand and reputation is going to make sure they have technicians that can repair appropriately.” ”

“ The Commission’s concern with repair restrictions [15] dates back more than forty years, to when the Commission’s then-Chairman testified in favor of the anti-tying provision of the Magnuson-Moss Warranty Act (the “MMWA”) . [16] The anti-tying provision, Section 102 (c) of the MMWA, prohibits a warrantor of a consumer product from conditioning its warranty on the consumer’s using any article or service which is identified by brand name unless the article or service is provided for free or the warrantor obtains a waiver from the Commission. ”

“ And, EPA encourages manufacturers to create products for longevity, durability, reusability and recyclability. The EPA also recommends that consumers do their part to prevent waste by recycling, donating functional, used electronics for reuse, and buying products with environmental concerns in mind. [236] Increasing repair options for consumers is harmonious with the responsibilities identified by the EPA (longer-living devices, giving consumers more ability to maintain those devices, and allowing for educated consumer purchases) and is likely to further decrease the production of e-waste. ”

“ Moreover, the specific changes that repair advocates seek to address manufacturer repair restrictions (e.g., access to information, manuals, spare parts, and tools) are well supported by comments submitted for the record and testimony provided at the Workshop. While the car manufacturing industry has taken important steps to expand consumer choice, other industries that impose restrictions on repairs have not followed suit. The Commission will consider reinvigorated regulatory and law enforcement options, as well as consumer education. ”

“ LKQ Corp. similarly pointed to the use of technology in cars to stop independent repair shops from using salvaged parts in the repair process: “With increasing frequency, vehicle manufacturers embed software restricting the reuse, repair and remanufacturing of an electronic control module or computer. This limits repair options to new OEM replacement parts only.” [221] Within the aftermarket industry, dealer prices for OEM parts are almost always the highest. Alternative parts, including remanufactured or salvage control modules, sell at a fraction of dealer prices.” ”

“ In addition, consumers may be able to purchase replacement parts in an aftermarket, perhaps to perform repairs themselves. Some OEMs participate in aftermarket service markets in competition with independent repair shops. Where that is the case, a manufacturer may steer aftermarket work toward its own services. Several scenarios described in this report involve business decisions made by the manufacturer that may restrict repair options by consumers or ISOs and make it difficult or impossible for ISOs to compete in aftermarkets. ”