Abstract
For more than two decades, a burgeoning “right-to-repair” movement has been underway in the United States, evolving from a nascent effort to democratize automobile repair into a cultural and legal force with ramifications in numerous industries. At the highest level, the right-to-repair movement aims to require manufacturers to provide consumers and independent repair providers with replacement parts, repair manuals, and other such materials used to fix products they own. Although activists have lobbied for the right to repair automobiles since at least 2001, right-to-repair legislation began to gain momentum over the past decade and has expanded from automobiles to other consumer goods, including cell phones, appliances, and other electronic devices, as well as agricultural and medical equipment.
Keywords
I. Introduction
For more than two decades, a burgeoning “right-to-repair” movement has been underway in the United States, evolving from a nascent effort to democratize automobile repair into a cultural and legal force with ramifications in numerous industries. At the highest level, the right-to-repair movement aims to require manufacturers to provide consumers and independent repair providers with replacement parts, repair manuals, and other such materials used to fix products they own. Although activists have lobbied for the right to repair automobiles since at least 2001, right-to-repair legislation began to gain momentum over the past decade and has expanded from automobiles to other consumer goods, including cell phones, appliances, and other electronic devices, as well as agricultural and medical equipment.
In this article, we survey the current state of the right-to-repair movement, including voluntary memoranda of understanding entered into between industry groups and manufacturers, federal and state legislative activity, policy considerations, and the application of federal antitrust law in the right-to-repair context. In the end, we conclude that the putative right to repair is better viewed as a consumer protection initiative than an antitrust problem.
In recent years, President Biden’s Administration, along with the Federal Trade Commission (“FTC”) and Department of Justice (“DOJ”), have prioritized establishing repair rights, with the FTC issuing a report entitled “Nixing the Fix,” instituting several enforcement actions against manufacturers, and supporting right-to-repair legislation, and both agencies recently appearing in federal litigation to support right-to-repair plaintiffs. Most recently, the FTC and DOJ submitted a comment as part of the regulatory process related to Digital Millennium Copyright Act (“DMCA”) exemptions. In addition, Congress has considered multiple bills that would increase consumer access to repair parts, information, and tools, although federal legislation has not yet been enacted. 1
At the state level, lawmakers around the country have proposed and enacted right-to-repair legislation, including in Rhode Island, Indiana, California, Massachusetts, New York, Minnesota, Colorado, and Oregon. These laws generally are not uniform and focus on different types of right-to-repair principles; they also seek to protect different classes of consumers.
Meanwhile, in the federal courts, the right-to-repair movement has run headlong into antitrust law, with several recent cases alleging antitrust violations when manufacturers seek to limit aftermarket repair options for their own products. These courts apply longstanding principles of antitrust law that permit companies selling durable goods in a competitive primary market to impose aftermarket repair restrictions, so long as such restrictions are transparently disclosed to buyers at the point of sale, especially in a contract. The DOJ and FTC, however, recently filed a Statement of Interest in a pending right-to-repair case, arguing against a factual presumption that primary market competition will discipline aftermarket conduct, even in cases where there are no allegations that consumers are surprised by aftermarket restrictions.
Overall, while antitrust law is focused on addressing rare market failures that result in aftermarket exploitation and supracompetitive pricing, the right-to-repair movement seeks to provide consumers with lower prices and more choices by eliminating virtually all post-sale impediments to repairs made by consumers themselves or by independent service organizations (“ISOs”). These superficially appealing objectives, however, may have unintended consequences that undermine the rationale for establishing a nationwide right-to-repair policy, whether by legislation, application of antitrust law, or a combination of the two.
II. Voluntary Memoranda of Understanding
Some manufacturers have sought to avoid right-to-repair legislation and enforcement by voluntarily undertaking to make aftermarket goods and services available to consumers and ISOs. For example, Participants in the automotive and agricultural equipment industries have entered into memoranda of understanding (“MOUs”), agreeing to share certain information and tools with consumers and third-party maintenance and repair professionals in exchange for guarantees of intellectual property protection and ongoing restrictions based on user safety.
In 2014, for example, the Alliance of Automobile Manufacturers, the Association of Global Automakers, the Automotive Aftermarket Industry Association, and the Coalition for Auto Repair Equality signed an MOU that created a limited but general right to repair automobiles nationwide. 2 The MOU followed the enactment of a motor vehicle right-to-repair law in Massachusetts, and the parties largely adopted the Massachusetts state standards in their agreements. 3 Since then, automakers have sometimes resisted legislation codifying the right to repair by touting the MOU. In Maine, for example, the Alliance for Automotive Innovation opposed an upcoming right-to-repair ballot initiative by citing the existing MOU. 4
Participants in the agricultural equipment industry have also agreed on repair rights. In 2023, the American Farm Bureau Federation signed MOUs with four prominent manufacturers of agricultural equipment that together account for approximately 70 percent of domestic sales—Deere & Co., CNH, AGCO, and Kubota—to allow farmers to diagnose, maintain, and repair their equipment. In return, the Farm Bureau agreed not to introduce or support right-to-repair legislation imposing obligations that extend beyond the MOUs. 5
Overall, MOUs are an effective solution to bridge the gap between manufacturers, on the one hand, and consumers and ISOs, on the other hand. MOUs allow industry participants to negotiate the scope of repair rights and avoid the prospect of legislation or government enforcement while reassuring consumers and independent repair shops that they will be able to access parts and associated repair information. But the MOUs generally allow the parties to dissolve their agreements if right-to-repair legislation is enacted, and the future of the MOUs is uncertain due to increased legislative activity.
III. Federal Enforcement
A. Congress Has Not yet Passed a Federal Right-to-Repair Law
At the federal level, right-to-repair legislation has been elusive. Lawmakers have proposed federal right-to-repair legislation over the last few years, but none has yet passed. Numerous right-to-repair bills were introduced during the 117th Congress (spanning from January 3, 2021, to January 3, 2023), but all four died in committee, including general right-to-repair bills with bipartisan support (S. 3830 and H.R. 4006), a bill targeting agricultural equipment (S. 3549), and another bill requiring certain telematic data to be shared with vehicle owners (H.R. 6570). 6 Two additional automotive right-to-repair bills were introduced in the most recent session of Congress (H.R. 906 and H.R. 1707), but neither has emerged from committee. 7 Meanwhile, right-to-repair activists continue to press for federal legislation, including to avoid an uneven patchwork of state laws that target a wide variety of different consumer interests and lack uniformity. 8
B. President Biden and the FTC Have Prioritized Right to Repair
Although there is no federal right-to-repair statute, President Biden, the FTC, and the DOJ have taken steps to advance the right-to-repair movement and fill the gap, ostensibly based on their existing legal authority. 9 These efforts began with a flurry of executive branch right-to-repair activity in mid-2021.
In May 2021, the FTC published a report to Congress—titled “Nixing the Fix”—detailing repair restrictions across the United States and describing potential policy solutions. 10 The report identified the following practices used to restrict repair rights:
Product designs that inhibit or prevent repair;
Unavailability of parts and repair information;
Policies or statements that steer consumers to authorized repair networks;
Application of patent rights and enforcement of trademarks;
Disparagement of third-party parts and independent repair;
Software locks and firmware updates;
End User License Agreements; and
Designs that make independent repairs less safe.
In the report, the FTC rejected manufacturers’ safety-based justifications for restricting repair access and recommended policy actions beyond industry self-regulation. 11
In June 2021, President Biden issued an Executive Order directing the FTC to promulgate rules protecting consumers’ ability to repair purchased goods. 12 Two weeks after the Executive Order, the FTC voted unanimously to take enforcement action against companies that limit the types of repairs independent repair shops can make. 13 In particular, the Commission unanimously adopted a Policy Statement in which it pledged to “prioritize investigations into unlawful repair restrictions under relevant statutes such as the Magnuson-Moss Warranty Act and Section 5 of the [FTC] Act.” 14 The Policy Statement also indicates that the FTC “will scrutinize repair restrictions for violations of antitrust laws,” including “tying arrangements or monopolistic practices—such as refusals to deal, exclusive dealing, or exclusionary design—that violate the Sherman Act.” 15
The Magnuson-Moss Warranty Act prohibits a company from conditioning a consumer product warranty on the use of brand-name parts or services unless they are provided for free. 16 It does, however, permit warranty exclusions for damage caused by unauthorized parts or service providers. The Act does not authorize the FTC to seek civil penalties or damages, but it does permit injunctive relief. 17 From 2009 to 2019, the FTC brought only one case alleging a violation of the Act, and it issued only a handful of warning letters to companies that appeared to be tying in violation of the Magnuson-Moss Warranty Act. 18
In 2022, however, the FTC ramped up its enforcement efforts and initiated actions against three different manufacturers that it claimed had illegally restricted the right to repair under the Magnuson-Moss Warranty Act. Specifically, the FTC alleged that Weber, Harley-Davidson, and Westinghouse voided customer warranties if they used unauthorized repair shops or third-party parts. 19 The FTC said that such warranty terms force consumers to use more expensive, manufacturer-provided options. 20 Harley-Davidson and Westinghouse entered into consent orders in which they agreed to adopt the following language in their warranties: “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.” 21 Weber also signed a consent order, agreeing to alter its warranty terms to inform customers that their warranties would remain in place even if they use third-party parts. 22
Despite such enforcement efforts, however, the FTC has not yet issued a proposed rule in response to President Biden’s July 2021 Executive Order. In November 2023, two industry groups—PIRG and iFixit—filed a petition to advance such right-to-repair rulemaking. 23 Public comments closed on February 2, 2024, with more than 1,700 comments submitted. 24 It remains to be seen how the FTC will respond to this petition and the many comments.
Most recently, in March 2023, the DOJ Antitrust Division and the FTC submitted a joint comment to the U.S. Copyright Office advocating for right-to-repair principles and supporting the renewal of certain DMCA exemptions. 25 In particular, the DOJ and FTC support (1) “renewing the current exemption related to computer programs that control devices designed primarily for use by consumers for diagnosis, maintenance or repair of the device and expanding it to include commercial and industrial equipment” and (2) “renewing an exemption related to the repair of motor vehicles and granting a new exemption to allow vehicle owners or independent repair shops to access, store and share vehicle operational data.” 26
While the right-to-repair movement has focused primarily on consumer goods, the DOJ/FTC comment encourages extending a right to repair to certain “commercial and industrial equipment” used by commercial entities at the enterprise level. In particular, the agencies advocated for expanding an exemption to DMCA Section 1201 for “commercial and industrial equipment,” including but not limited to “commercial soft serve machines; proprietary diagnostic kits; programmable logic controllers; and enterprise IT.” 27 Expanding right-to-repair principles to encompass goods purchased by sophisticated commercial enterprises, as opposed to everyday consumers, is consistent with the wide focus on right to repair mandated by the Biden Administration since at least 2021. As explained below, however, these consumer protection initiatives do not align neatly with federal precedent on antitrust aftermarkets.
IV. State Statutes
When the FTC issued its “Nixing the Fix” report in 2021, Massachusetts, Rhode Island, Indiana, and California had already enacted right-to-repair laws, although the Massachusetts law was still subject to a legal challenge and had yet to be enforced. 28 Each of these laws had a different focus. The Rhode Island law requires that automakers make service information and parts available to independent repair companies (but not consumers) for at least four years after the date of last sale of any given model and prohibits insurers from mandating that repairs be made at a particular repair shop. 29 In contrast, Indiana requires manufacturers of audio or visual entertainment devices costing at least $50 to provide information and parts until seven years after the manufacture date. 30 For its part, California’s Song-Beverly Act requires manufacturers that make an express warranty when selling an electronic or appliance product to supply information and parts to independent repair companies. 31
Since then, lawmakers in dozens of states have introduced right-to-repair bills, and several have enacted legislation. The bills vary; some are general and encompass a broad range of industries, while others target specific goods (such as medical devices, agricultural equipment, or automobiles). For example, Massachusetts has its automotive right-to-repair law, New York and Minnesota recently passed digital right-to-repair laws, Colorado enacted the first agricultural right-to-repair law, and Oregon has enacted its own law that prohibits “parts pairing” for electronic devices.
A. The Massachusetts Automotive Right-to-Repair Law Remains in Limbo
Massachusetts passed the nation’s first automotive right-to-repair law in 2020, but the statute faced immediate challenges. 32 Two prominent auto manufacturers chose not to activate telematic safety features on cars sold in Massachusetts to avoid violating the law. 33 And on June 13, 2023, the National Highway Traffic Safety Administration (“NHTSA”) told automakers to disregard the Massachusetts law, because it conflicts with the federal Safety Act; in particular, NHTSA and several auto manufacturers maintained at the time that sharing internal system information on these vehicles creates a risk hacking into the cars to take control or weaponize them. 34 In August 2023, however, the NHTSA reversed course and endorsed compliance. 35 Regardless, access to telematic systems poses unique challenges for the right-to-repair movement, and it is possible that similar cybersecurity concerns could threaten right-to-repair initiatives that apply to cell phones and computers, which are also susceptible to hacking and may contain sensitive data that needs to be protected from unauthorized access.
B. New York Passed the First Consumer Electronics Right-to-Repair Law
New York’s Digital Fair Repair Act passed in December 2022 and went into effect in July 2023. 36 Under the statute, consumer electronics manufacturers selling their wares in New York must make diagnostic and repair information available to independent repair providers. 37 Right-to-repair advocates argue that the law was critically weakened before passage, because it now applies only to small consumer electronics manufactured after July 1, 2023, does not require manufacturers to provide security codes needed to unlock and repair a device, and allows manufacturers to decline to deliver components where there is a risk of injury. 38 Even so, New York’s law is the first that applies to a wide array of consumer electronics. The Business Council of New York State opposed the bill, saying that it requires manufacturers to send sensitive and technical information about equipment to “almost any repair provider who requests it,” risking the exposure of trade secrets. 39
C. Minnesota Followed with a More Comprehensive Digital Repair Act
In May 2023, Minnesota passed its own Digital Fair Repair Act, which encompasses not only small consumer electronics but also home appliances and commercial computing systems. 40 The law explicitly applies to sales between businesses and between businesses and governments, such as computer sales to public schools. 41 The statute does not go into effect until July 1, 2024, but it will apply retroactively to goods manufactured after July 1, 2021. The Minnesota law seeks to protect intellectual property by exempting tools or parts that (1) would disable or override antitheft security measures, (2) could reasonably be used to compromise cybersecurity, or (3) would provide external access to trade secrets or personal information. 42 While the law exempts agricultural and medical equipment, automobiles, and specialized cybersecurity tools, it is nevertheless more comprehensive than its New York counterpart and any other state right-to-repair law. 43
D. California Follows Suit with Its Own Digital Right-to-Repair Law
In October 2023, California joined New York and Minnesota by enacting its own Right to Repair Act for consumer electronics (e.g., laptops, tablets, and appliances). 44 Like the Minnesota law, California’s right-to-repair statute will take effect on July 1, 2024, and apply retroactively to devices sold since July 1, 2021. 45 Manufacturers must make documentation and parts available to owners and independent repair shops on fair and reasonable terms whenever such materials are made available to manufacturer-authorized repair shops. 46 This requirement lasts for three years after the last manufacturing date for devices that cost between $50 and $99.99, or for seven years for devices that cost $100 or more. 47
E. Colorado May Further Expand Repair Rights
Eleven states considered agricultural equipment right-to-repair bills in 2023, but Colorado was the first state to successfully pass such legislation. Initially, in 2022, Colorado passed a law that protects consumers’ right to repair their wheelchairs. 48 The 2023 Consumer Repair Bill of Rights Act amends the wheelchair-repair law to require that agricultural equipment manufacturers make available repair information and tools. 49 The law also prohibits contractual relationships that remove or limit the availability of such tools. 50 The new law includes intellectual property protections like those in agricultural equipment industry MOUs, and it also prohibits unsafe modifications to equipment. 51 As stated above, the agricultural equipment industry MOUs contain a provision that allows for dissolution if right-to-repair legislation passes, and it is unclear what impact the Colorado law will have on the MOUs, if any.
In 2024, the Colorado General Assembly is considering expanding the state’s right-to-repair law even further to reach digital electronic equipment, and the FTC recently appeared before the Committee on Business Affairs and Labor to support the new legislation. 52 In particular, the FTC voiced support for restrictions on “parts pairing,” where a “manufacturer’s approval is required before replacement parts can be fully integrated into a device.” 53
F. Oregon Enacts a Digital Right-to-Repair Law Banning Parts Pairing
In March 2024, the Oregon legislature enacted its own Right to Repair Act (SB 1596) that applies to consumer electronics. 54 While such laws already exist in California, Minnesota, and New York, the Oregon law is the first to explicitly prohibit parts pairing, starting in 2025. As in Colorado, the FTC voiced its support for the restrictions on parts pairing in a letter signed by the heads of its Bureau of Consumer Protection and Office of Policy Planning. 55
V. Policy Considerations
The right-to-repair movement is popular among consumers, which explains the political support for right-to-repair enforcement activity at the federal level and among state legislatures. In a 2021 survey, 78 percent of respondents supported right-to-repair legislation, and 85 percent said that vehicle data should be widely available to consumers and independent repair shops. 56 There are some obvious benefits for purchasers and users of small electronics, appliances, automobiles, and agricultural equipment: lower costs and access to more repair options, including do-it-yourself (“DIY”) repairs and independent repair shops. 57 Other policy considerations cited by right-to-repair advocates are not as clear cut.
For example, activists also argue that right-to-repair legislation benefits the environment by reducing waste, 58 but some researchers predict negative consequences. 59 One study published in February 2023 found that “manufacturers may initially cut the new product price and then raise it,” particularly for products with intermediate production costs, potentially compromising manufacturer profit, reducing consumer surplus, and hurting the environment. 60 For devices with low-to-intermediate production costs, like mobile phones, a right to repair may benefit consumers but harm the environment as a result of manufacturers flooding the market with low-priced products, motivating customers to purchase new products rather than to repair the ones they already own. 61 As to products with high production costs and purchase prices, manufacturers are more likely to make repairs available for free. 62 The environmental impact is particularly evident with respect to automobiles, where the right to repair is likely to incentivize owners to keep obsolete, gas-guzzling cars on the road longer, rather than switching to newer and more environmentally friendly models. 63 Of course, costs are not the only factor in consumer decisions about whether to replace or repair an item, and some consumers will simply opt to replace certain products (e.g., mobile phones and automobiles) with new models as a result of social, cultural, or psychological factors (e.g., for status signaling). 64
Moreover, open access to repair information can create significant cybersecurity and user-safety risks, although the FTC has downplayed the severity of such risks, including in its 2021 report. 65 Critics of right-to-repair legislation, like the Security Industry Association, argue that allowing customers to fix their own devices provides hackers increased access to exploitable technology. 66 When NHTSA told automakers not to comply with the Massachusetts law, it likewise stated that open remote access to telematic data for repair purposes could expose vehicles to hacking, allowing bad actors to seize control of vehicles to conduct terror attacks. 67 In its 2021 “Nixing the Fix” report, however, the FTC found “no empirical evidence to suggest that independent repair shops are more or less likely than authorized repair shops to compromise or misuse customer data,” and it also stated that sharing diagnostics and firmware patches is unlikely to create new security risks. 68
VI. Federal Antitrust Law
Right to repair issues have also been at the center of an evolving strand of antitrust law, which focuses on the potential for aftermarket exploitation unchecked by competition. For decades, courts deciding federal antitrust claims have grappled with right-to-repair principles in cases involving challenges to various efforts by manufacturers or franchisors to exclude aftermarket competition. Such cases arise, for example, when manufacturers seek to prevent unauthorized service providers or ISOs from repairing their products, often by withholding access to parts. Accordingly, there is a great deal of overlap between the objectives of plaintiffs in such cases and the right-to-repair movement.
The Supreme Court’s decision in Eastman Kodak Co. v. Image Tech. Servs., 504 U.S. 451 (1992), is the seminal case in this area. Since the Supreme Court decided Kodak, the federal courts have developed a body of caselaw that governs antitrust aftermarket claims. Generally, a plaintiff in such a case must show that interbrand competition in a primary market (e.g., for automobiles) does not discipline conduct for aftermarket goods and services (e.g., for repair of a particular brand of automobiles). As a result, an aftermarket restriction disclosed at the time of sale in a competitive primary market generally does not violate the antitrust laws, particularly when such a restriction is a contractual condition of sale. 69 Instead, to obtain antitrust relief, a plaintiff must show that market conditions allow for aftermarket exploitation (i.e., supracompetitive pricing) unchecked by primary market competition, which can occur when the challenged aftermarket restriction is not disclosed at the point of sale in transparent fashion, significant information costs prevent accurate lifecycle pricing, and owners are “locked in” by high switching costs. 70
As is evident from this rubric, courts applying antitrust law focus principally on the prevailing economic conditions in the relevant market and will intervene only to address a market failure leading to the rare situation where primary market competition does not discipline an aftermarket. 71 To the extent consumer welfare factors into the equation, the main question is whether owners are charged above-market prices due to unanticipated post-sale restrictions.
In contrast, right-to-repair activists seek to open aftermarkets to unfettered competition, even where there is no market failure and customers knew full well about aftermarket restrictions when they made their purchases. The policies underlying the right-to-repair movement are much more ambitious than simply protecting competition, as is evident from recent decisions applying the antitrust laws to aftermarket restrictions involving the repair of automobiles and agricultural equipment.
A. Tesla Defeated Antitrust Claims Because Its Post-Sale Repair Restrictions Were Generally Known to Consumers
In November 2023, the U.S. District Court for the Northern District of California dismissed a class action complaint against Tesla alleging antitrust violations arising from Tesla’s policy of limiting repair options for owners of its electric vehicles (“EVs”). 72 In particular, the lawsuit asserted antitrust claims based on allegations that Tesla owners had no choice but to use Tesla or a Tesla-authorized repair shop for Tesla EV repairs, including because Tesla refused to supply replacement parts to independent repair shops. 73
To prevail on any of their antitrust claims under Kodak, the plaintiffs needed to establish the existence of economically relevant single-brand aftermarkets for Tesla repair services or Tesla parts by alleging (and then proving) that (1) Tesla’s aftermarket restrictions are not “generally known” to consumers at the point of purchase, (2) significant information costs prevent accurate life-cycle pricing, (3) significant switching costs (monetary or non-monetary) have a lock-in effect, and (4) general market-definition rules (i.e., cross-elasticity of demand) do not undermine the putative single-brand market. 74 The court found that plaintiffs could not establish any of the first three elements, with a principal focus on the “generally known” test. 75
In line with Kodak and its progeny, particularly in the Ninth Circuit, the court concluded that plaintiffs “fail to allege that any restrictions are not generally known.” 76 In other words, the court determined that plaintiffs failed to make allegations sufficient to establish that Tesla’s aftermarket conduct is undisciplined by competition in the primary market for EVs. The court was unmoved by allegations that Tesla misled consumers about the amount of maintenance required or how long the maintenance would take, because “nowhere do Plaintiffs allege that consumers are in fact unaware of the supposedly supracompetitive prices and exorbitant wait times in the relevant aftermarkets.” 77 To the contrary, plaintiffs undermined their own claims by admitting in the complaint that “that such problems are widely documented.” 78 As a result, the Court dismissed plaintiffs’ federal antitrust claims (and their related state-law claims), albeit with leave to amend the complaint and try again. 79
B. Deere & Co. Faces Antitrust Claims Because of Allegations That Equipment Buyers Were Unaware of Aftermarket Repair Restrictions
Just ten days later, also in November 2023, the U.S. District Court for the Northern District of Illinois denied a motion to dismiss a class action complaint alleging antitrust aftermarket claims against Deere & Co (“Deere”). 80 The claims arise from allegations that Deere leads consumers to believe they will be able to repair their own agricultural equipment or use independent repair shops but then, after the point of sale, seeks to restrict repairs to its own dealerships or authorized repair shops (i.e., an alleged “bait and switch” tactic). 81
In contrast to the Tesla case, the court concluded that the plaintiffs adequately pled the existence of an economically relevant aftermarket for Deere repair services. As in Tesla, the court looked for allegations of lock-in, switching costs, and information costs, with particular focus on customer knowledge at the point of sale.
82
Unlike in Tesla, however, the complaint contained “almost eight pages of allegations related to the relevant aftermarket, setting forth Deere’s alleged history of making various representations that purchasers could repair their own Tractors but in reality thwarting purchasers’ efforts.”
83
According to the court, plaintiffs sufficiently stated a “change of policy/bait-and-switch theory” based on allegations Deere represent[ed] that farmers could repair their own Tractors or use “independent repair shops” to induce farmers to purchase a Tractor costing upwards of $1 million—the bait—but then in real-world practice [maintained a policy] that prohibits them from doing so and forcing them to use Dealerships after the significant financial outlay—the switch.
84
The court found that “[t]he reasonable inference from these allegations is that Deere—by itself or through its agents—repeatedly made public statements that purchasers could make repairs to their own Tractors but the reality was they couldn’t.” 85
The court also left open the possibility that plaintiffs could make out an aftermarket claim “based on a lack of knowledge because of the unavailability of information to determine a product’s life cycle costs” (i.e., without a bait-and-switch policy change after the point of purchase). 86 This aspect of the court’s opinion hews closely to the arguments in a Statement of Interest filed in the case by the DOJ Antitrust Division. 87 The Statement of Interest cites the FTC’s “Nixing the Fix” report and describes the right-to-repair movement, all as a lead-up to arguing against a factual presumption that primary market competition will discipline aftermarkets unless customers are deceived or surprised by aftermarket restrictions. 88 Citing Kodak and its progeny, the Antitrust Division argued that information costs that make lifecycle pricing difficult are sufficient to establish an economically relevant aftermarket when combined with other factors, even in the absence of aftermarket deception or surprise. 89 In its opinion, the court agreed and declined to presume that deception or surprise must be present to sever the connection between primary market competition and aftermarket behavior. 90
Although the courts reached different conclusions, these recent decisions each affirm the longstanding principle that aftermarket restrictions disclosed to buyers at the point of purchase do not run afoul of antitrust laws. In such situations, buyers can take account of the aftermarket conditions when assessing their options, and aftermarket conduct will be disciplined by primary market competition, leaving no market failure to redress. The Deere decision does, however, leave open the possibility that a lack of transparency about aftermarket expenses may result in the sort of information costs that, in combination with other factors, could suffice to make out an aftermarket claim under federal antitrust law.
VII. Conclusions
One way to reconcile the right-to-repair movement with antitrust law is to think of the former as a consumer protection initiative and the latter as a check against market failure. Indeed, the right-to-repair movement is focused on consumer products (e.g., mobile phones, printers, and other electronic devices) that can be replaced with a different brand at a relatively low cost if consumers become dissatisfied with aftermarket restrictions. For example, if one mobile phone company limits repairs to authorized providers, a consumer can switch to another mobile phone provider to avoid the inconvenience or cost of repair, without a substantial outlay of capital. In other words, this hypothetical consumer is not “locked in” by switching costs.
In contrast, a Kodak-based antitrust claim is rooted in economic theory and requires allegations and proof of “lock-in” from high switching costs that make it difficult for owners to move to another brand when faced with unexpected post-sale restrictions. As a result, Kodak claims are much stronger when the primary market good is costly and durable, which is more likely when the case involves an enterprise-level product purchased by a business. Indeed, switching costs are so low for many electronic devices, like mobile phones, that Kodak claims may not survive, particularly where the cost of repair eclipses the cost of switching brands.
Overall, right-to-repair principles make more sense with respect to consumer products than with durable goods sold to businesses, which generally involve more sophisticated purchasers. Perhaps as a result, the New York and Minnesota right-to-repair laws exclude from their ambit public safety communications equipment, motor vehicles, agricultural equipment, and medical devices. 91 Going forward, it will be important to maintain such distinctions to avoid applying consumer-protection legislation at the enterprise level.
Finally, while it is appealing to provide consumers with lower prices and more choices via right-to-repair legislation, there may be unintended consequences. For example, manufacturers that transparently adopt a closed system for repair of their own products are better able to protect the value of their brand. After all, when a product breaks or fails, the natural response is to blame its manufacturer, rather than oneself following DIY repairs or cut-rate repairs from an unauthorized provider. There are also safety risks with the right to repair, as is evident from the concerns about access to vehicle telematic data that could, in theory, be used to hack into and weaponize automobiles. As explained above, the environmental impact of right-to-repair legislation is not yet clear cut. Accordingly, the overall impact of the ongoing right-to-repair movement remains to be seen.
Footnotes
Correction (August 2024):
Article updated to correct the affiliation of the author “Matthew Lechner” from “Associate, Faegre Drinker, Washington, DC, USA” to “Legal Clerk. Admitted only in Pennsylvania; supervision by principals of the firm admitted to the D.C. bar, Faegre Drinker, Washington, DC, USA.”
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) received no financial support for the research, authorship, and/or publication of this article.
1.
E.g., Motor Vehicle Owners’ Right to Repair Act of 2001, S. 2617, 107th Cong. (2002).
2.
Memorandum of Understanding, AAIA, CARE, Alliance, & Global Automakers (Jan. 15, 2014).
4.
5.
6.
Fair Repair Act, S. 3830, 117th Cong. (2022); Fair Repair Act, H.R. 4006, 117th Cong. (2021); Agricultural Right to Repair Act, S. 3549, 117th Cong. (2022); REPAIR Act, H.R. 6570, 117th Cong. (2022).
7.
REPAIR Act, H.R. 906, 118th Cong. (2023); SMART Act, H.R. 1707, 118th Cong. (2023).
8.
9.
10.
11.
Id. at 54.
12.
Exec. Order No. 14,036, 86 Fed. Reg. 36,987 (July 14, 2021).
13.
14.
15.
Id.
16.
Magnuson-Moss Warranty Act, 15 U.S.C. § 2310.
17.
Id.
18.
19.
Press Release, Fed. Trade Comm’n, FTC Takes Action Against Harley-Davidson and Westinghouse for Illegally Restricting Customers’ Right to Repair (Jun. 23, 2022), https://www.ftc.gov/news-events/news/press-releases/2022/06/ftc-takes-action-against-harley-davidson-westinghouse-illegally-restricting-customers-right-repair-0; Press Release, Fed. Trade Comm’n, FTC Takes Action Against Weber for Illegally Restricting Customers’ Right to Repair (Jul. 7, 2022), 
.
20.
Id.
21.
Id.
22.
Id.
23.
89 Fed. Reg. 286 (Jan. 3, 2024).
25.
26.
Id.
27.
28.
See Nixing the Fix, supra, at 47.
29.
R.I. Gen. Laws Ann. § 6A-2-329(5); § 27-29-4(15).
30.
Ind. Code Ann. § 26-2-6-2.
31.
Cal. Civ. Code § 1793.03.
32.
33.
Id.
34.
35.
36.
2022 N.Y. Laws, S4104-A.
37.
Id.
38.
39.
40.
See 2023 Minn Laws, S.F. 1598.
41.
Id.
42.
Id.
44.
Cal. Pub. Res. Code § 42488.2.
45.
Id.
46.
Id.
47.
Id.
48.
Colo. Rev. Stat. § 6-1-1503.
49.
Id.
50.
Id.
51.
Id.
52.
53.
Id.
54.
2024 Or. Laws, SB 1596.
55.
56.
57.
58.
59.
Chen Jin et al., Right to Repair: Pricing, Welfare, and Environmental Implications, 69(2)
60.
Id. at 1017.
61.
Id. at 1033.
62.
Id.
63.
Manufacturers operating in the EU should be aware (1) that their obligation to repair a product is limited in circumstances where the repair is more expensive than replacement and (2) of proposed regulations applicable to potential environmental impacts arising from the right to repair movement. See Commission Regulation (EU) No 461/2010 of 27 May 2010 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices in the motor vehicle sector (OJ L 129, 28 May 2010, p. 52), https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2010:129:0052:0057:EN:PDF; Proposal for a Directive of the European Parliament and of the Council on common rules promoting the repair of goods and amending Regulation (EU) 2017/2394, Directives (EU) 2019/771 and (EU) 2020/1828, 2023/0083 (COD) (22 March 2023), .
65.
Nixing the Fix, supra, at 30.
66.
67.
Shepardson, supra.
68.
Nixing the Fix, supra, at 31.
69.
E.g., Avaya Inc. v. Telecom Labs, Inc., 838 F.3d 354, 405 (3d Cir. 2016) (“We agree that no antitrust liability for a Kodak-style attempted monopolization claim could lie after May 2008 when customers were put on clear notice that purchasing an Avaya PBX precluded use of ISP maintenance. . . . Avaya cannot be liable under the antitrust laws for enforcing a transparent contract freely agreed to in a competitive market.”); Newcal Indus. Inc. v. Ikon Office Sol., 513 F.3d 1038, 1048-49 (9th Cir. 2008), cert. denied, 557 U.S. 903 (2009) (holding that “the law prohibits an antitrust claimant from resting on market power that arises solely from contractual rights that consumers knowingly and voluntarily gave to the defendant” or where “a consumer’s selection of a particular brand in the competitive market is the functional equivalent of a contractual commitment, giving that brand an agreed-upon right to monopolize its consumers in an aftermarket”); Queen City Pizza Inc. v. Domino’s Pizza Inc., 124 F.3d 430, 440 (3d Cir. 1997), cert. denied, 523 U.S. 1059 (1998) (same); PSI Repair Servs., Inc. v. Honeywell, Inc., 104 F.3d 811, 820-21 (6th Cir.), cert. denied, 520 U.S. 1265 (1997) (“[W]e thus hold that an antitrust plaintiff cannot succeed on a Kodak-type theory when the defendant has not changed its policy after locking-in some of its customers, and the defendant has been otherwise forthcoming about its pricing structure and service policies.”); Digit. Equip. Corp. v. Uniq Digital Techs., Inc., 73 F.3d 756, 763 (7th Cir. 1996) (“The Court did not doubt in Kodak that if spare parts had been bundled with Kodak’s copiers from the outset, or Kodak had informed customers about its policies before they bought its machines, purchasers could have shopped around for competitive life-cycle prices. The material dispute that called for a trial was whether the change in policy enabled Kodak to extract supra-competitive prices from customers who had already purchased its machines.”); Lee v. Life Ins. Co. of N. Am., 23 F.3d 14, 20 (1st Cir.), cert. denied, 513 U.S. 964 (1994) (“[T]he timing of the ‘lock in’ at issue in Kodak was central to the Supreme Court’s decision. . . . Had previous customers known, at the time they bought their Kodak copiers, that Kodak would implement its restrictive parts-servicing policy, Kodak’s ‘market power,’ i.e., its leverage to induce customers to purchase Kodak servicing, could only have been as significant as its [market power] in the copier market, which was stipulated to be inconsequential or nonexistent.”)
70.
See Collins Inkjet Corp. v. Eastman Kodak Co., 781 F.3d 264, 277-78 (6th Cir. 2015) (“The classic indicators of market power in an aftermarket—high information costs and switching costs—are present here. The availability of information about aftermarket pricing in the primary market (information costs) and the difficulty of switching to a different primary market supplier (switching costs) can both serve to insulate a primary market from the effects of aftermarket price increases, thus increasing the seller’s market power in the aftermarket.”); Harrison Aire, Inc. v. Aerostar Intern., Inc., 423 F.3d 374, 382-83 (3d Cir. 2005), cert denied, 547 U.S. 1020 (2006) (identifying factors present in Kodak that “supported a reasonable inference of monopoly power in the relevant aftermarket,” including “significant information costs that prevented lifecycle pricing by primary market customers” and “high ‘switching costs’ that served to ‘lock in’ Kodak’s aftermarket customers”); Lee, 23 F.3d at 20 (same).
71.
See, e.g., Surgical Instrument Serv. Co. v. Intuitive Surgical, Inc., 571 F. Supp. 3d 1133, 1140 (N.D. Cal. 2021) (“Here, the primary market is not competitive—Intuitive Surgical has a monopoly in the market for surgical robots used in minimally invasive, soft-tissue surgery. According to the allegations in the complaint, Intuitive Surgical’s ability to forbid health care providers from purchasing refurbishment services from other suppliers flows not from a voluntary choice by health care providers in a competitive market, but from Intuitive Surgical’s monopoly power.”).
72.
Lambrix v. Tesla, Inc., Case No. 23-cv-01145-TLT (N.D. Cal.), Dkt. 122 (Order Granting Defendant’s Motion to Dismiss dated November 17, 2023) (“Tesla Opinion”).
73.
Tesla Opinion at 2–3.
74.
Id. at 10–13 (citing Epic Games, Inc. v. Apple, Inc., 67 F.4th 946, 977 (9th Cir. 2023), cert. denied, 144 S. Ct. 681 (2024)).
75.
Id. at 10–11.
76.
Id.
77.
Id.
78.
Id.
79.
at 10–16.
80.
In re: Deere & Co. Repair Serv. Antitrust Litig., Case No. 3:22-cv-50188, MDL No. 3030 (N.D. Ill.), Dkt. 159 (Memorandum Opinion and Order dated Nov. 27, 2023) (“Deere Opinion”).
81.
Deere Opinion at 43–61.
82.
Id. at 45–46.
83.
Id. at 49–52.
84.
Id. at 51–52, 55.
85.
Id. at 51.
86.
Id. at 53–55.
87.
In re: Deere & Co. Repair Serv. Antitrust Litig., Case No. 3:22-cv-50188, MDL No. 3030 (N.D. Ill.), Dkt. 118 (DOJ Statement of Interest dated Feb. 13, 2023) (“DOJ Statement of Interest”).
88.
DOJ Statement of Interest at 2–7.
89.
Id. at 9–23.
90.
Deere Opinion at 49–52.
91.
2023 Minn Laws, S.F. 1598; 2022 N.Y. Laws, S4104-A.