In this episode of Regulatory Oversight, Stephen Piepgrass is joined by colleagues Brad Weber and Christy Matelis from the firm’s Antitrust Practice Group to explore the evolving landscape of right-to-repair laws across the United States.
Continue Reading From Cell Phones to Tractors: The Right to Repair Movement Drives On
On January 15, the Federal Trade Commission (FTC), Minnesota, and Illinois filed a lawsuit against Deere & Company (Deere). The complaint, which Michigan, Wisconsin, and Arizona have since joined, accuses Deere of creating and maintaining a repair services monopoly and engaging in anticompetitive business practices that interfere with farmers’ rights to repair their Deere agricultural equipment in violation of federal and state antitrust laws.
Continue Reading FTC, States Sue John Deere in Right to Repair Lawsuit
Introduction
The National Defense Authorization Act (NDAA) for 2025 includes a mandate that contractors furnish information and documentation to enable the military to modify and repair equipment and systems. Not surprisingly, industry is pushing back on that mandate. On September 25, Senator Elizabeth Warren (D-MA) sent a letter to various industry associations, questioning their motives to prevent a right-to-repair requirement that the Senate included in its proposed defense budget for fiscal year (FY) 2025. Warren also sent a separate letter to Secretary of Defense Lloyd Austin, expressing concern about contractual restrictions that void contractor warranties when third parties perform repairs and that prevent access to operations, maintenance, integration, and training data.
Continue Reading Contractors Oppose the “Right to Repair” Mandate Proposed Under NDAA 2025
As predicted in our previous articles, the “right to repair” movement continues to garner support as more state governments consider legislating in this area. We previously reported that in 2021, 27 states had pending legislation addressing “right to repair” laws (discussed in our previous article here). Already this year, 33 states have considered some form of “right to repair” legislation.[1] The latest of these legislative efforts comes out of California, where on September 13, the Senate unanimously passed SB-244, the Right to Repair Act.[2] Once Governor Newsom signs the bill into law, California will join Colorado, New York, and Minnesota as the fourth state to enact the “right to repair” legislation.[3] We expect more states to follow.
Continue Reading Riding the Wave of Right to Repair: California Joins the Movement
The right to repair movement continues to gain traction internationally as local, state, federal, and supernational bodies further move to support broader consumer access to repairs with both carrot and stick. In Europe, the Data Act proposed by the European Commission on February 23 specifically characterizes the access to user-generated data required for repair or maintenance as reinforcing the “right to use and dispose of lawfully acquired possessions.”[1] Meanwhile in the wake of a local program in which the city of Vienna directly subsidized the costs of repairing rather than replacing household items and furniture,[2] a national repair subsidy specifically targeting electronic waste is expected to take effect in Austria this month.[3] Stateside, a local repair subsidy following the Vienna model has recently been introduced in Portland, OR,[4] while, as previously reported,[5] more than half of states had pending legislation addressing the right to repair in 2021.
The focus of the proposed legislation varies from state to state, reflecting local interest and need. Nebraska’s bill, for example, targets agricultural equipment,[6] while California, in the midst of the COVID-19 pandemic, introduced a bill addressing the repair of medical devices.[7] An increasing number of states, including Hawaii[8] to Washington[9] and Connecticut,[10] are now focusing on personal electronic devices, and have proposed legislation requiring manufacturers to make the documentation, tools, and parts necessary to repair their devices available to consumers.
Large manufacturers are taking note and responding to this growing public and regulatory interest. In the last two weeks, both Samsung and Google have announced that they are voluntarily implementing programs that provide their customers with greater access to the materials necessary to repair their mobile phones. On March 31, Samsung announced that:
Galaxy device owners will be able to take product repair into their own hands for Samsung’s most popular models, the Galaxy S20 and S21 family of products, and the Galaxy Tab S7+ beginning this summer. Samsung consumers will get access to genuine device parts, repair tools, and intuitive, visual, step-by-step repair guides.[11]
On April 8, Google, in turn, announced that:
Starting later this year, genuine Pixel spare parts will be available for purchase at ifixit.com for Pixel 2 through Pixel 6 Pro, as well as future Pixel models, in the U.S., UK, Canada, Australia and EU countries where Pixel is available.[12]
Google elaborated that “[t]he full range of spare parts for common Pixel phone repairs,” including “batteries, replacement displays, cameras and more,” and “tools like screwdriver bits and spudgers” would be available. However, unlike Samsung, Google does not specifically address the provision of guides or directions to consumers, noting that their intended audience is “independent repair professionals and skilled consumers with the relevant technical experience” necessary to make the repairs.
As the various pending bills are discussed, amended, and voted upon, we expect to continue to see more manufacturers announcing that they will voluntarily comply with the proposed legislation and provide consumers with some degree of access to the parts, information, and tools necessary to repair their equipment. Given the ubiquity of personal electronics and the increasing number of states targeting this technology in particular, we particularly expect to see manufacturers of phones, computers, and other personal devices at the forefront in implementing such programs.
[1] See https://www.medianama.com/wp-content/uploads/2022/04/Data_Act_zyPHqpq5gpO6IVnfiuToCIYKlOM_83521.pdf.
[2] See https://mein.wien.gv.at/wienerreparaturbon/#/; https://wien.orf.at/stories/3143824/.
[3] See https://elektrobranche.at/artikel/reparaturbonus-startet-mitte-april/.
[4] See https://www.repairpdx.org/.
[5] See https://news.bloomberglaw.com/banking-law/states-attorneys-general-to-expand-national-roles-in-2022.
[6] See https://nebraskalegislature.gov/FloorDocs/107/PDF/Intro/LB543.pdf.
[7] See https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220SB605.
[8] See https://legiscan.com/HI/text/HB415/id/2456286.
[9] See https://lawfilesext.leg.wa.gov/biennium/2021-22/Pdf/Bills/House%20Bills/1212.pdf?q=20220412074631.
[10] See https://www.cga.ct.gov/2021/TOB/H/PDF/2021HB-05826-R00-HB.PDF.
[11] See https://news.samsung.com/us/samsung-self-repair-program-ifixit-customer-first-care-experience/.
[12] See https://www.blog.google/outreach-initiatives/sustainability/pixel-phone-repairs/.
On March 24, a bipartisan group of 27 state attorneys general sent a letter to Congress, encouraging the passage of “right-to-repair” legislation to establish and secure a competitive marketplace for repairing vehicles, agricultural equipment, and electronics.
Continue Reading Twenty-Seven AGs Ask Congress to Pass Right-to-Repair Legislation
This article was originally published in Westlaw Today and is republished here with permission.
As detailed in our articles[1] earlier this year, the “right to repair” movement has gained significant steam in the last year. The right to repair movement is an effort focused on ensuring that consumers and aftermarket businesses have the ability to repair, maintain, and/or modify the devices and equipment consumers purchase.
In July 2021, President Biden issued an executive order asking the Federal Trade Commission to draft “right-to-repair” rules to increase consumers’ ability to repair equipment on their own or at after-market repair shops. Less than a month later, the FTC unanimously announced that it would ramp up its enforcement against illegal repair restrictions.
Then in January, the president again announced his support for the right-to-repair movement in remarks at a meeting with White House Competition Council. Days later, members of Congress began to announce proposed federal legislation that would regulate the right to repair in specific industries like agricultural equipment and automotive vehicles, signaling, as we suggested, “major changes in the way software access and warranty restrictions are regulated.”
Now, one year after President Biden announced his support for the right to repair movement, we are beginning to see a true shift in the regulatory landscape. This summer the FTC announced several major settlements based on right to repair issues, making good on its word to ramp up enforcement.
For example, in June the FTC announced it was taking action against Westinghouse outdoor generator maker MWE Investments, LLC for allegedly illegally restricting customers’ right to repair their purchased products by offering limited warranties voided by a customer’s use of other companies or unauthorized dealers for repairs.[2]
The complaint[3] alleged violations of the Magnuson Moss Warranty Act, a law that prohibits tying a consumer’s warranty to the use of a specific service provider or product without an FTC-issued waiver,[4] as well as the Federal Trade Commission Act, which prohibits, among other things, certain types of unfair competition and deceptive conduct.[5]
Specifically, the FTC claimed that MWE offered warranties for one year from the date of purchase and replacement parts for three years from the date of purchase, but, through its written warranty conditions, MWE listed certain “exclusions” including “portable generators that utilize non-MWE Investments, LLC replacement parts” as well as “products that are altered or modified in a manner not authorized in writing by MWE Investments, LLC.”[6]
According to the FTC, MWE did not seek the required waiver that would permit them to condition warrant coverage “on the use of genuine MWE Investments parts and accessories” in direct violation of the Magnusson Moss Warranty Act.[7]
Meanwhile, the FTC alleged that MWE falsely represented to consumers that its warranty conditions were valid, which the FTC believed to be a violation of the FTC Act’s prohibition of unfair or deceptive acts or practices in or affecting commerce.[8]
Through a consent order, MWE neither admitted nor denied any of the Commission’s allegations but agreed to certain injunctive terms, including removing the terms the FTC alleged violated the law, providing notice of the consent order to customers, and undertaking efforts to ensure that MWE-authorized dealers compete fairly with independent third parties.[9]
The consent order also provided for compliance monitoring, requiring the company to respond to requests from the Commission with sworn statements and reports.
On July 7, 2022, the FTC announced its “third right-to-repair lawsuit in as many weeks,” issuing a press release regarding a settlement with grill maker Weber-Stephen Products, LLC.[10] The allegations against Weber were almost identical to those against MWE — the user manual for certain Weber grills stated that “[t]he use and/or installation of parts on your WEBER products that are not genuine WEBER parts will void this warranty, and any damages that result hereby are not covered by this warranty.”[11]
Like MWE, Weber neither admitted nor denied the FTC’s allegations, but agreed to certain injunctive terms. For example, Weber will be required to add specific language to its warranty saying, “Using third-party parts will not void this warranty.”[12]
Takeaways
As the Director of the Commission’s Bureau of Consumer Protection Samuel Levine has made clear: “Companies that use their warranties to illegally restrict consumers’ right to repair should fix them now.”[13] While this may seem like a straightforward directive, for some companies it will involve a careful revaluation of their current business models.
Take for example the automotive industry. As we highlighted in our most recent article on this topic, car makers are increasingly embracing a subscription-based model for certain car features such as active driving assistance, voice recognition, or heated seats.[14]
The idea behind a subscription-based model is that automotive makers can streamline manufacturing by building all cars to more uniform specifications and can then create a steady stream of recurring revenue for years after initial purchase by requiring consumers to pay to unlock certain features.
However, we have already seen a small market of “coders” who offer to activate features on cars that may not have been activated at the time they were sold, allowing consumers to avoid the extra fees. Car companies may seek to prevent consumers from coding their automobiles to activate subscription-based features, without paying for a subscription, by limiting their cars’ warranties, such that any use of coding to avoid paying for certain features voids the warranty.[15]
If the FTC says that such warranty restrictions are illegal, automotive makers will need to consider a new strategy to combat coding, or perhaps even rethink their adoption of the subscription-based model in a right-to-repair world.
[1] Stephen Piepgrass and Abbey Thornhill, President Biden Doubles Down His Support for “Right-to-Repair” Movement, Regulatory Oversight (Feb. 8, 2022), https://www.regulatoryoversight.com/2022/02/president-biden-doubles-down-his-support-for-right-to-repair-movement/; Stephen Piepgrass and Abbey Thornhill, The clash of two movements, Thomas Reuters: Westlaw Today (April 22, 2022), https://www.troutman.com/images/content/3/1/v2/310874/WLT_Piepgrass.pdf.
[2] Press Release, FTC, FTC Takes Action Against Harley-Davidson and Westinghouse for Illegally Restricting Customers’ Right to Repair (June 23, 2022), https://www.ftc.gov/news-events/news/press-releases/2022/07/ftc-takes-action-against-weber-illegally-restricting-customers-right-repair.
[3] See Complaint, In re MWE Investments, LLC (F.T.C. 2022), https://www.ftc.gov/system/files/ftc_gov/pdf/2223012WestinghouseComplaint.pdf.
[6] Complaint at ¶¶ 4–7, In re MWE.
[7] Id. at ¶ 8.
[8] Id. at ¶¶ 17–21.
[9] Consent Order, In re MWE (F.T.C. 2022), https://www.ftc.gov/system/files/ftc_gov/pdf/2223012WestinghouseACCO.pdf.
[10] Press Release, FTC, FTC Takes Action Against Weber for Illegally Restricting Customers’ Right to Repair (July 7, 2022) (quoting Samuel Levine), https://www.ftc.gov/news-events/news/press-releases/2022/07/ftc-takes-action-against-weber-illegally-restricting-customers-right-repair.
[11] Complaint at ¶ 6, In re Weber-Stephen Products LLC (F.T.C. 2022), https://www.ftc.gov/system/files/ftc_gov/pdf/6.27.22%20Weber%20admin%20complaint.pdf.
[12] Consent Order, In re Weber (F.T.C. 2022), https://www.ftc.gov/system/files/ftc_gov/pdf/Agreement%20Containing%20Consent%20Order%20(6.17.22).pdf.
[13] Press Release, supra n.10 (quoting Samuel Levine).
[14] Piepgrass and Thornhill, The clash of two movements, supra n.1.
[15] Adrian Padeanu, BMW Heated Seats Subscription Is Real And It Costs $18 Per Month, Motor1.com (July 11, 2022), https://www.motor1.com/news/597376/bmw-heated-seats-subscription/amp/.
The “right-to-repair” movement continues to gain momentum, and as predicted, litigation has started even in the absence of enacted right-to-repair laws. In a recently filed class-action complaint in the U.S. District Court for the Northern District of Illinois, the plaintiff alleges that the equipment manufacturer deliberately prevents farmers from repairing their own equipment or using independent repair shops, which the plaintiff argues are antitrust violations under Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2. See Eagle Lake Farms Partnership v. Deere & Co., No. 3:22-cv-50078 (N.D. Ill.).
By way of brief background, the “right to repair” generally refers to laws or regulations that ensure that consumers (or after-market businesses) can repair, maintain, or modify the devices and equipment they purchase even when the manufacturer of those devices and equipment attempts to require the consumer to use only “original equipment manufacturer” replacement parts and services.
We recently reported that more than half of all states had pending legislation in 2021 to address right-to-repair laws (discussed in our previous article here) and that President Biden recently reiterated his commitment to right-to-repair rules, with legislators taking those comments to propose new laws on the issue (discussed in our previous article here). Even in the absence of such laws though, we anticipated that litigants and regulators would use existing antitrust laws and consumer protection laws to increase scrutiny of practices that restrict consumers’ right to repair.
The recently filed Eagle Lake Farms lawsuit is one such example. In that case, the complaint alleges that farmers traditionally had the ability to repair and maintain their own tractors, or at least had the option to bring their tractors to an independent mechanic for repairs. However, the complaint alleges that John Deere deliberately monopolizes the repair and maintenance market by making crucial software and repair tools inaccessible to farmers and independent repair shops. The complaint further alleges that John Deere also prevents its network of highly consolidated dealerships (Dealerships) from providing farmers and repair shops with access to the same software and tools used by the Dealerships, which provides John Deere and the Dealerships with “supracompetitive profits from the sale of repair and maintenance services.” The complaint brings eight counts under the Sherman Act for antitrust violations, as well as counts for promissory estoppel and unjust enrichment. The complaint’s proposed nationwide class includes “[a]ll persons and entities residing in the United States who, during the Class Period of January 10, 2018 to the present, purchased Deere Repair Services for Deere Tractors from Defendant or Deere’s authorized Dealers and/or technicians.”
While we continue to expect that states and the federal government will enact right-to-repair laws this year, we anticipate an increase in investigations, enforcement proceedings, and lawsuits from private litigants and regulators using existing antitrust laws in the absence of right-to-repair legislation. The Eagle Lake Farms lawsuit provides but one example of such a strategy. As courts interpret the scope of antitrust enforcement in the context of the right-to-repair movement, we anticipate that regulators will proceed with their own enforcement actions to shape the right-to-repair jurisprudence.
At Troutman Pepper, we understand the complexities of the intersection of law and technology in a changing legal and regulatory landscape. Our team is dedicated to breaking down complex legal issues and providing guidance that manufacturers and businesses can understand.
Last month President Joe Biden made headlines when he reiterated his support for “right-to-repair” rules, which he first announced in a July 2021 executive order (discussed in our previous article here). The executive order asked the Federal Trade Commission (FTC or Commission) to draft “right-to-repair” rules to increase consumers’ ability to repair equipment on their own or at aftermarket repair shops. The order also requested that the U.S. Department of Agriculture consider new rules intended to increase industry competition by examining intellectual property rights and potentially giving farmers the right to repair farming equipment.
The “right to repair” generally refers to proposed legislation or regulations that ensure consumers, or aftermarket businesses, have the ability to repair, maintain, and/or modify the devices and equipment consumers purchase even where the manufacturer has attempted to require the consumers to use only “original equipment manufacturer” (OEM) replacement parts and services. As President Biden explained in remarks on January 24, 2021, “[d]enying the right to repair raises prices for consumers, means independent repair shops can’t compete for business.”[1]
In his comments, the president addressed what he considered as positive developments in right-to-repair space. As he noted, since his July 2021 executive order issued, the FTC has unanimously announced that it will ramp up enforcement against illegal repair restrictions.[2] In doing so, the Commission stated that “it would target repair restrictions that violate antitrust laws enforced by the FTC and the FTC Act’s prohibitions on unfair and deceptive acts or practices.”[3] The Commission also urged the public to submit complaints of Magnuson-Moss Warranty Act violations, which prohibits, among other things, tying a consumer’s product warranty to the use of a specific service provider or product, unless the FTC has issued a waiver.[4]
President Biden also alluded to self-implemented reform actions of Apple and Microsoft. In November 2021, Apple announced “Self Service Repair, which will allow customers who are comfortable with completing their own repairs access to Apple genius parts and tools.”[5] Apple’s announcement came just one month after Grist reported that Microsoft had “agreed to take concrete steps to facilitate the independent repair of its devices following pressure from its shareholders.”[6]
Less than two weeks after the president issued new comments on the right to repair, Montana Senator Jon Tester introduced his Agriculture Right to Repair Act — a bill aimed at “guarantee[ing] farmers the right to repair their own equipment and end[ing] current restrictions on the repair market.”[7]
Two days later, Illinois Congressman Bobby L. Rush introduced the Right to Equitable and Professional Auto Industry Repair Act, which seeks to “preserve consumer access to high quality, affordable vehicle repair by ensuring that vehicle owners and independent repair shops have equal access to repair and maintenance tools and data as car companies and licensed dealerships.”[8] Manufacturers in all industries should prepare for similar potential legislative developments and continued FTC scrutiny, as the president doubles down on his support for the “right-to-repair” movement.
[1] Remarks by President Biden Before Meeting with White House Competition Council (Jan. 24, 2022), https://www.whitehouse.gov/briefing-room/speeches-remarks/2022/01/24/remarks-by-president-biden-before-meeting-with-the-white-house-competition-council/.
[2] Press Release, Fed. Trade Comm’n, “FTC to Ramp Up Enforcement Against Illegal Repair Restrictions” (July 21, 2021), https://www.ftc.gov/news-events/press-releases/2021/07/ftc-ramp-law-enforcement-against-illegal-repair-restrictions.
[3] Id.
[4] Id.
[5] See Press Release, Apple, “Apple announces Self Service Repair” (Nov. 17, 2021), https://www.apple.com/newsroom/2021/11/apple-announces-self-service-repair/.
[6] Maddie Stone, “Bowing to investors, Microsoft will make its devices easier to fix,” Grist (Oct. 7, 2021).
[7] Press Release, U.S. Senator for Montana, “‘Right to Repair’ Farm Equipment and Empowering Family Farmers is Aim of Testers’ New Groundbreaking Legislation” (Feb. 1, 2022), https://www.tester.senate.gov/?p=press_release&id=8866#:~:text=As%20a%20part%20of%20his,restrictions%20on%20the%20repair%20market.
[8] Press Release, U.S. Congressman Bobby L. Rush, “Rush Introduces REPAIR Act to Ensure Equal Access to Auto Repair Data for Independent Repair Shops and Preserve Consumer Choice” (Feb. 3, 2022), https://aasp-pa.org/federal-repair-act-introduced/.
A federal district judge in Massachusetts entered a nearly $51 million judgment against Commonwealth Equity Group LLC (d/b/a Key Credit Repair) and its CEO after granting summary judgment in favor of the Consumer Financial Protection Bureau (CFPB) and Massachusetts Attorney General (AG) Andrea Campbell. The lawsuit alleged that the company violated federal and state consumer protection and telemarketing laws. The company and CEO were found jointly liable for $31.7 million in restitution and each ordered to pay more than $19 million in penalties.
Continue Reading CFPB and Massachusetts AG Win $50M Judgment Against Credit Repair Services Company