FTC Turns Focus to Repair Restrictions in New Policy Statement

On July 21, 2021, and in response to President Biden’s Executive Order calling on the FTC to address repair restrictions, the FTC unanimously adopted the Right to Repair Policy Statement related to manufacturer and seller restrictions to product repairs. In the policy statement, the FTC announced its plans to prioritize enforcement against unlawful repair restrictions, including promoting possible updates to state and federal legislation. Manufacturers and sellers should ensure compliance with current consumer protection and antitrust laws and monitor potential rulemaking, a path the FTC is careening toward.

The FTC expressed concern that repair restrictions make it more difficult for competitors, local businesses, and consumers to repair products. In a May 2021 report to Congress, Nixing the Fix: An FTC Report to Congress on Repair Restrictions, the FTC detailed manufacturer-created restrictions, including limiting the availability of parts, software, and telematics information and access to authorized repair networks; designing products to make self-repairs less safe; asserting trademark and patent rights in an overbroad manner; and implementing restrictive end-user license agreements and software locks. The FTC also warned that repair restrictions drive up repair costs, repair wait times, and electronic waste; reduce competition; and have an especially large impact on communities of color and lower-income Americans.

As part of its plan to curb unlawful repair restrictions, the FTC will investigate current law violations and promote possible law updates. Specifically, the FTC will seek further information and public comment, and consider promulgating rules under the Magnuson-Moss Warranty Act and enforcing any potential regulations through legal action. Additionally, the FTC will consider conducting further investigations into deceptive or unfair conduct under the FTC Act or antitrust law violations and will coordinate with state law enforcement and policymakers to update existing laws and regulations and ensure compliance.

Commissioner Chopra issued a separate statement on the repair restrictions, stating his support for the FTC’s policy statement while noting some additional concerns and further steps the FTC should take. Commissioner Chopra detailed repair restrictions that are “matters of life and death,” including restrictions on hospitals fixing ventilators, families self-repairing household appliances, and service members’ self-repairing gear. He also highlighted delays in manufacturer repairs that cause farmers to suffer spoiled crops and lost income and schools to face laptop shortages during remote learning. In addition to the steps the FTC listed in its policy statement, Commissioner Chopra would like the FTC to solicit complaints and further information from the independent repair community, review the reportfraud.ftc.gov website to ensure ease of reporting, reform procurement policies that currently restrict government buyers from self-repair or seeking third-party repair services, and assist state and federal policymakers in creating and enforcing Right to Repair laws.

The policy statement follows previous FTC work, including calls in 2019 for public comments and empirical research and data, a workshop, and the previously mentioned May 2021 report to Congress. The new focus on repair restrictions should serve as a warning to manufacturers and sellers – seek the help of counsel to review any repair restrictions for compliance with consumer protection and antitrust laws and watch for any pending legislation.