[co-author: Taylor Daly]
On Wednesday, July 21, the Federal Trade Commission (FTC or the “Commission”) unanimously voted to issue a new policy statement to target unlawful right to repair acts or practices that violate competition laws or Section 5 of the FTC Act, 15 U.S.C. § 45, during an open meeting of the Commission. The Commission’s vote follows its release of the “Nixing the Fix” report, which the Commission unanimously authorized staff to send to Congress on May 6, 2021.
During the meeting, Chair Lina Khan noted that the policy statement outlines the need for the Commission to target acts or practices that violate competition laws and use its full range of expertise to protect consumers from unlawful restrictions. Chair Khan also indicated that she will soon invite public comment on contract terms that undermine competition.
The meeting discussion reflected bipartisan consensus, with Republican Commissioners Noah Joshua Phillips and Christine Wilson speaking in support of the statement. Commissioner Rohit Chopra also outlined the need for the FTC to take additional actions beyond adopting the policy statement, including actively engaging the independent repair community to solicit complaints, working with other agencies to reform existing procurement policies and devoting resources to assisting policy-makers, including those at the state and local level, as they craft right to repair laws.
The full policy statement calls on the public to submit complaints to assist with greater enforcement of the Magnuson-Moss Warranty Act and its regulations. The statement also indicates that the FTC will consider filing suit against violators of the Magnuson-Moss Warranty Act to seek injunctive relief, monitor private litigation to determine whether the FTC should investigate a pattern of unfair or deceptive acts or practices or file an amicus brief, and explore any needed rulemaking.
Further, the FTC will scrutinize repair restrictions for violations of the antitrust laws, including under the Sherman Act (e.g., exclusive dealing, refusals to deal, etc.), and examine whether, under the Section 5 of the FTC Act, repair restrictions may constitute unfair methods of competition, or unfair or deceptive acts or practices.