Big Tech Goes All In to Thwart Right to Repair Initiatives

By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She is currently writing a book about textile artisans.

Bloomberg today published an article, Microsoft and Apple Wage War on Gadget Right-to-Repair Laws, which delved into the details of how big Tech – Microsoft, Google, Apple – thwart right to repair initiatives.

There’s considerable support among the public for right to repair initiatives. Not only could such measures save consumers considerable sums of money, they might also alleviate shortages – of laptops for schools, as just one example (see Waste Watch: Right to Repair as Remedy for School Computer Shortage?)

Enacting a right to repair nationwide could also reduce waste -especially e-waste –  and slow climate change. According to Bloomberg:

America’s smartphone habit alone eats up some 23.7 million tons of raw material, according to a report from U.S. PIRG. The consumer group estimated that people holding onto their smartphones for an extra year would be the emissions equivalent of taking 636,000 cars off the road.

The pandemic has exacerbated repair problems, as many big box stores have stopped offering on-site repair services. Such shutdowns further tether consumers to manufacturers’ repair options – some of which suffer considerable backlogs. Allowing independent, third party repair shops to compete on an equal playing field could also bolster local employment, rather than global supply chains (see Right to Repair: Saves Consumers Money, Promotes Local Jobs Rather than Global Supply Chains).

FTC Weighs In

Earlier this month, the Federal Trade Commission (FTC)  released a comprehensive report, Nixing the Fix: an FTC Report to Congress on Repair Initiatives. The report endorsed the right to repair and debunked opposing arguments, concluding “there is scant evidence to support manufacturers’ justifications for repair restrictions.”

The report also examined measures the FTC could take to enact a right to repair. These include expanding the anti-tying provisions of the 1975 Magnuson-Moss Warranty Act (MMWA). This measure “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 [FTC}.” [Report, p. 5.] MMWA bars a printer manufacturer from conditioning its warranty on a purchaser’s use of the manufacturer’s branded ink and prohibits a smartphone maker from voiding a warranty if a consumer has a third-party repair service install a new battery

The FTC noted that technological developments have occurred in the years since MMWA was enacted during the Ford administration that warrant reconsideration of the anti-tying provision as it applies to repair. From the Report:

Even when a warranty does not explicitly require that repairs be performed by the original equipment manufacturer (OEM) using OEM parts, many manufacturers restrict independent repair and repair by consumers through:

• • Product designs that complicate or prevent repair;
  • Unavailability of parts and repair information;
  • Designs that make independent repairs less safe;
  • Policies or statements that steer consumers to manufacturer repair networks;
  • Application of patent rights and enforcement of trademarks;
  • Disparagement of non-OEM parts and independent repair;
  • Software locks and firmware updates; or
  • End User License Agreements. [Report, p. 6.]

The FTC laid out a future agenda in the Report:

Finally … we conclude by explaining that, based on the record before us, it
is clear that repair restrictions have diluted the effectiveness of [the MMWA] and steered consumers into manufacturers’ repair networks or to replace products before the end of their useful lives. Based on a review of comments submitted and materials presented during the Workshop, there is scant evidence to support manufacturers’ justifications for repair restrictions. 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. In addition to the FTC’s pursuit of efforts under its authority, the Commission stands ready to work with legislators, either at the state or federal level, to ensure that consumers and independent repair shops have appropriate access to replacement parts, instructions, and diagnostic software. [Jerri-Lynn here: my emphasis, Report p. 6; citations omitted.]

Focus Shifts to States

Meanwhile, while the FTC mulls its options and Congresscritters digest its report, more than two dozen states are considering legislation to enact their own state right to repair legislation. What are their prospects?

Alas, not as promising as you might think. According to Bloomberg:

Twenty-seven states considered such bills in 2021. More than half have already been voted down or dismissed, according to consumer groups tracking the proposals.

One reason these legislative efforts have failed is the opposition, which happens to sell boatloads of new devices every year. Microsoft’s top lawyer advocated against a repair bill in its home state. Lobbyists for Google and Amazon.com Inc. swooped into Colorado this year to help quash a proposal. Trade groups representing Apple Inc. successfully buried a version in Nevada. Telecoms, home appliance firms and medical companies also opposed the measures, but few have the lobbying muscle and cash of these technology giants. While tech companies face high-profile scrutiny in Washington, they quietly wield power in statehouses to shape public policy and stamp out unwelcome laws. Tech companies argue that right-to-repair laws would let pirates rip off intellectual property and expose consumers to security risks. In several statehouses, lobbyists told lawmakers that unauthorized repair shops could damage batteries on devices, posing a threat of spontaneous combustion.

Consumer groups don’t buy these claims. They say tech firms are holding fast to a status quo that forces consumers to pay more for repairs or simply buy new devices. “These companies have monopoly power,” said Brianna Titone, a Colorado legislator who sponsored a repair bill. “They’re not looking for a compromise. They’re looking for, ‘Leave us alone. Stop this. Go away.’”

The Bloomberg article further explores the gory details of some Big Tech lobbying efforts and I encourage interested readers to read it in full. Now I’d just like to point out that it’s not necessary for a majority or even many states to pass legislation for a right to repair be widely enacted. Once one state domino falls, others are likely to follow. That might trigger a response akin to what occurred after Massachusetts voters approved a right to repair for cars and other passenger vehicles. From the FTC Report:

For any manufacturing sector interested in creating a self-regulatory mechanism for expanding repair options, the experience of the automobile industry provides some guidance. In January 2014, two car manufacturer trade groups and two trade groups representing independent repair shops and manufacturers of aftermarket parts entered into a Memorandum of Understanding (“MOU”) that had the effect of creating a broad, if not complete, right to repair in the automotive industry across the United States.

The MOU came about after Massachusetts passed its own automotive right to repair law. In an effort to prevent the passage of state bills around the country that all contained differing requirements, manufacturers agreed to sell the diagnostic and repair information that manufacturers make available to their dealers to car owners and independent repair shops. in exchange, the repair-side trade groups agreed to not fund or otherwise support any new state right to repair legislation.

The MOU has been raised as a model of self-regulation that could apply in the broader right to repair context. Kyle Wiens of iFixit stated at the Workshop, for example, the the
MOU is “the direction that we need to go in. And it’s a question of. . .do you need the regulatory framework?  Can you do it in a voluntary fashion? [Report pp. 45-46; citations omitted.]

I don’t know the answer to that question – although I’m inherently suspicious of such “voluntary” self-regulatory schemes, particularly considering all the shenanigans Big Tech companies have engaged in to try to scuttle enacting any right to repair. Yet if one state were to enact legislation, a nationwide de facto right might follow soon thereafter, as companies seek to avoid complying with a plethora of inconsistent state statutes.