FTC and Right to Repair

Kelley Drye & Warren LLP
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Companies watching the “right to repair” legislation proposed in some states should not lose sight of the federal landscape. Last week the FTC released a bipartisan report concluding that there is “scant evidence to support manufacturers’ justifications for repair restrictions.” This will likely add momentum to groups pushing for legislation requiring companies, particularly electronics manufacturers, to create products that people can fix without extra costs or having to purchase special tools.

The report responds to a Congressional directive to report on anticompetitive practices related to repair markets. It reflects information provided in connection with a 2019 FTC workshop on repair restrictions,  empirical data, public responses, and independent research. In the report the FTC states that, as many consumer products have become harder to fix and maintain with repairs requiring specialized tools and other generally inaccessible materials such as proprietary diagnostic software, consumers have very limited choices when their products. The FTC also highlights  the burdens to communities of color and lower incomes, and the amplified effects in connection with COVID-19.

Congress and the FTC have addressed previous concerns about the potential for anticompetitive effects associated with warranty repairs. The Magnuson-Moss Warranty Act contains an anti-tying provision (Section 102(c)) that prohibits a warrantor from conditioning its warranty on the consumer’s using any article or service identified by brand name unless the article or service is provided for free or the warrantor obtains a waiver from the Commission. The FTC believes that a significant number of technological advancements and repair restrictions have “diluted” the anti-tying provision and “steered consumers into manufacturers’ repair networks or to replace products before the end of their useful lives.”

To address these concerns, the Commission will consider “reinvigorated” regulatory and law enforcement options and consumer education.

The FTC also expressed willingness to work closely with Congress on potential legislative options.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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