We previously covered the emergence of the so-called “Right to Repair” legislative movement, which seeks to allow consumers the right to modify and repair their own electronic devices, rather than relying on the manufacturer to make or authorize repairs with proprietary products. The movement has gained the support of several lawmakers in the United States, but is widely opposed by many products manufacturers. Since our prior piece, there have been several notable developments regarding the movement, including the following:
- New York Senate Approves Digital Fair Repair Act
- NY Congressman Introduces Federal Bill
- President Biden’s Executive Order
- FTC Unanimous Vote
We will address each in turn.
1. NEW YORK SENATE APPROVES DIGITAL FAIR REPAIR ACT
On February 2, 2021, New York State Senator Neil Breslin introduced a bill titled the “Digital Fair Repair Act,“[1] which was approved by the State Senate on June 10, 2021 on passed to the State Assembly for consideration. This bill would “require original equipment manufacturers to make diagnostic and repair information for digital electronic parts and equipment available to independent repair providers and consumers if such parts and repair information are also available to OEM authorized repair providers.”[2] The timeline of this bill is not clear and it still must pass the Assembly and be signed by the Governor to take effect.
2. NEW YORK CONGRESSMAN INTRODUCES FEDERAL BILL
Mere days after the state bill was approved by the New York Senate, on June 17, 2021 New York Congressman Joseph Morelle introduced a near-identical federal bill. In his press release, Morelle promises: “This common-sense legislation will help make technology repairs more accessible and affordable for items from cell phones to laptops to farm equipment, finally giving individuals the autonomy they deserve.”[3] He stated that the current process of going through original equipment manufacturers or an authorized vendor is too costly or burdensome for the consumer, which was exacerbated by COVID-19.[4]
The text of the legislation, otherwise cited as H.R. 4006 or the “Fair Repair Act,” includes:
(a) General Requirement.—For digital electronic equipment sold or used in the United States, an original equipment manufacturer shall make available, for the purposes of diagnosis, maintenance, or repair of such equipment, to independent repair providers or owners of such digital electronic equipment manufactured by or on behalf of, or sold or otherwise supplied by the original equipment manufacturer, in a timely manner and on fair and reasonable terms, documentation, parts, and tools, inclusive of any updates to information or embedded software.[5]
The text also includes an additional requirement related to express warranties. If the original manufacturer has made an express warranty and the wholesale price of the equipment is $100 or more, the manufacturer shall provide such parts, tools, or documentation to enable the repair during the warranty period and an “equitable price and convenience of delivery” in light of:
- Actual cost to the OEM to prepare and distribute the part, tool, documentation, exclusive of any research and development costs incurred
- The ability of owners and independent repair providers to afford the part, tool, or documentation; and
- The means by which the part, tool, or documentation is provided.[6]
This proposed bill provides for two methods of enforcement. First, any violations will be treated as a violation of a rule defining an unfair or deceptive act or practice prescribed under section 18(1)(B) of Federal Trade Commission Act.[7] The Commission may “prescribe any regulations it determines necessary to carry out this Act.”[8]
Second, state attorney generals have power to bring an action under their consumer protection law or may bring a civil action in any court of competent jurisdiction.[9] The state may seek to enjoin further violations, enforce compliance, obtain civil penalties, or obtain damages, restitution or other compensation on behalf of residents of the State.[10] The state is required to provide prior written notice to the Commission, “except in any case in which such prior notice is not feasible, in which case the attorney general shall serve such notice immediately upon instituting such action.”[11] The Commission then has the right to intervene, be heard, and to file petitions for appeal.[12]
This bill does not include an exception for security related functions on devices. This means that for any device that contains an electronic security lock or security-related function, the OEM is required to make available “through appropriate secure data release systems” the “special documentation, tools, and parts needed to disable to lock or function, and to reset it when disabled in the course of diagnosis, maintenance, or repair of the equipment.”[13] However, the Bill purports to protect trade secrets as “[n]othing in this Act shall be construed to require an original equipment manufacturer to divulge a trade secret,” but also includes “except as necessary to provide documentation, parts, and tools on fair and reasonable terms.”[14] There is no language in the bill indicating how the FTC intends to protect such trade secrets.
The bill also provides that it would not interfere with any agreements with authorized repair providers, unless such agreements limit the OEM’s obligations to comply with the Fair Repair Act. Any such agreements would be void and unenforceable.[15]
This bill does not apply to motor vehicles or medical devices.[16]
3. PRESIDENT BIDEN’S EXECUTIVE ORDER ON PROMOTING COMPETITION IN THE AMERICAN ECONOMY
On July 9, 2021, President Biden entered a sweeping Executive Order covering a variety of topics including labor, agriculture, transportation, internet services, and healthcare. The stated goal of the order is to promote competition in the marketplace.[17] As part of this goal, President Biden endorsed the Right to Repair concept and directs the FTC to draft new regulations limiting device manufacturers’ ability to restrict independent repairs of their products.[18] However, President Biden’s order does not offer specifics into how to complete these objectives and which parties will be affected.
4. FTC VOTE
On July 21, 2021, the FTC hosted the Open Commission Meeting and voted unanimously to ramp up enforcement against repair restrictions that prevent small businesses, workers, consumers, and government entities from fixing their own products.[19] FTC Chair Lina M. Khan stated: “These types of restrictions can significantly raise costs for consumers, stifle innovation, close off business opportunity for independent repair shops, create unnecessary electronic waste, delay timely repairs, and undermine resiliency… The FTC has a range of tools it can use to root out unlawful repair restrictions, and today’s policy statement would commit us to move forward on this issue with new vigor.”[20]
OVERALL
Although there have been multiple developments in the past year surrounding the so-called Right to Repair, there still have not been any concrete steps for implementation. Any new regulations or enforcement actions will likely face intense opposition by multiple industries. However, it appears that the momentum for independent repair is growing and, thus, the movement is unlikely to go away.
[1]https://www.nysenate.gov/legislation/bills/2021/S4104#:~:text=This%20legislation%20will%20require%20manufacturers,information%20being%20withheld%20by%20manufacturers.
[2] Id.
[3] https://morelle.house.gov/media/press-releases/congressman-joe-morelle-introduces-fair-repair-act
[4] Id.
[5] H.R. 4006 (a).
[6] H.R. 4006 Sec. 2 (b)(1)-(3).
[7] 15 U.S.C. 57a(a)(1)(B).
[8] H.R. 4006 Sec. 3(a)(2)(B).
[9] H.R. 4006 Sec. 3(b)(1).
[10] Id.
[11] H.R. 4006 Sec. 3(b)(2).
[12] H.R. 4006 Sec. 3(b)(2)(A)-(C).
[13] H.R. 4006 Sec. 4(1).
[14] H.R. 4006 Sec. 4(2).
[15] H.R. 4006 Sec. 4(3).
[16] H.R. 4006 Sec. 4(4)-(5).
[17] See Executive Order on Promoting Competition in the American Economy | The White House.
[18] Id.
[19] https://www.ftc.gov/news-events/press-releases/2021/07/ftc-ramp-law-enforcement-against-illegal-repair-restrictions
[20] Id.
