ADventures in Law

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“Right to repair” is a consumer protection issue that is rapidly picking up steam. In addition to <a href="https://www.nbcwashington.com/news/consumer/right-to-repair-bill-aims-to-give-consumers-product-fix-choices/3006974/">federal legislation</a> that was introduced in 2022, there has been quite a lot of recent state legislative activity. And we have seen a lot more Federal Trade Commission (FTC) activity on the issue lately.

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So what exactly is the right to repair? A 2021 FTC report to Congress, cleverly called “<a href="https://www.nbcwashington.com/news/consumer/right-to-repair-bill-aims-to-give-consumers-product-fix-choices/3006974/">Nixing the Fix</a>,” described the right to repair as addressing how manufacturers may limit repairs by consumers and repair shops, and how those limitations may increase costs and limit consumer choices. The report discussed the issue through a broad regulatory lens and discussed several potential FTC repair tools in this area, including the Magnuson-Moss Warranty Act. The Mag-Moss Warranty Act – not to be confused with Mag-Moss rulemaking – broadly addresses issues involving warranties for consumer products. The “anti-tying” section of the act generally prohibits warranty provisions that provide that a consumer will lose warranty coverage if they don’t use company parts for repair unless the company also provides those parts free of charge. There is a lot more to the act, but for today, that’s all we need to know. In short, the anti-tying provisions do not look kindly on warranty provisions that restrict repair options for consumers.

A few weeks ago, the agency announced two law enforcement actions involving the act, and it just recently announced a third. In general, the FTC has been alleging that the companies had user manuals and warranties that stated that warranties would be void is consumers used or installed parts that were not genuine branded parts. All three cases settled, with the companies agreeing to the usual things, such as not violating the act again, but also agreeing to disclose in future warranties that using third-party parts will not void the warranty. In addition, the orders require broad notice to purchasers as well as website notices.

And in case you were wondering “Hey, why is the FTC not getting any money here? They seem to oddly still like getting money whenever possible.” Well, if they could, they would, but the Act does not allow for penalties. But going forward, since these three companies will be under order, future violations could lead to significant penalties.

A few weeks ago, Chair Lina Khan and Commissioner Becca Slaughter issued a joint <a href="https://www.ftc.gov/system/files/ftc_gov/pdf/2223012_2123140HarleyMWEChairStatement.pdf">statement</a>, which set forth some of the reasons why this is a priority area for the agency. They stated, “Illegal repair 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 – harms that can have an outsized impact on low income communities in particular.”

The Act addresses one fairly narrow aspect of broader right-to-repair issues – how warranties relate to repairs. But there are many other right-to-repair issues – such as product designs that may complicate repair, lack of access to parts, and repair information and designs that may make independent repairs less safe – that go beyond the scope of that act. It remains to be seen whether the FTC will start to look at repair issues with a broader range of tools, but certainly Mag-Moss Warranty Act issues are the key tool at the moment. Right to repair is indeed a hot topic in 2022. Suffice it to say, if you sell a consumer product with a warranty, it is a good time to take a fresh look at the terms of the warranty to make sure you stay out of the FTC crosshairs.

A Flurry of Right to Repair Activity from the FTC – What You Need to Know