FTC Announces Two Actions on Right to Repair While Legislative Efforts Continue

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The FTC is focused on ensuring that consumers have options when it comes to repairing products. In 2019, they held a workshop to discuss manufacturer restrictions on repair rights. In a 2021 report, they concluded there was “scant evidence to support manufacturers’ justifications for repair restrictions.” After that, they issued a Policy Statement calling for more aggressive enforcement against manufacturers that impose these restrictions. Last week, we may have seen the start of that enforcement.

According to the FTC, Harley-Davidson and Westinghouse both included illegal terms that voided warranties if customers used anyone other than the companies and their authorized dealers to get parts or repairs for their products. For example, a Harley warranty encouraged consumers to “insist that your authorized Harley-Davidson dealer uses only genuine Harley-Davidson replacement parts and accessories to keep your Harley-Davidson motorcycle and its limited warranty intact.”

These types of restrictions violate the Magnuson Moss Warranty Act, which broadly prohibits companies from conditioning a consumer product warranty on the consumer’s use of any article or service which is identified by brand name unless it is provided for free. Companies can, however, exclude warranty coverage for defects or damage caused by unauthorized parts or service.

Under the terms of the settlements, the companies are prohibited from telling consumers that their warranties will be void if they use third-party services or parts, or that they should only use branded parts or authorized service providers. Moreover, the companies both agreed to affirmatively inform consumers of their rights. For example, warranties must disclose that “taking your product to be serviced by a repair shop that is not affiliated with or an authorized dealer of [Company] will not void this warranty. Also, using third-party parts will not void this warranty.”

While the FTC took action under existing law, federal and state legislatures continue efforts to pass legislation specific to right to repair. For example, earlier this month New York passed the first “right to repair” bill that requires all manufacturers of “digital electronic equipment” to make available to consumers and repair shops the information, tools, and spare parts needed to fix covered devices.

Companies that offer product warranties should take a close look at their warranty terms and related communications to ensure that they comply with the Magnuson Moss Warranty Act and developing federal and state laws specific to right to repair. We’re likely to see more of these actions on the federal and state levels.

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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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