FTC Report Finds Manufacturers’ Repair Restrictions Unwarranted

A just-issued report by the US Federal Trade Commission confirms that anti-repair actions by large companies are hurting small businesses, undermining your ownership rights, and hurting the planet. Of course, these are the very problems that we’ve been fighting for the past fifteen years—but it’s validating to see US government confirmation of the market imbalance.

The unanimous report, nearly two years in the making, follows public hearings and testimony from the FTC’s “Nixing the Fix” workshop in July 2019, and a demand from Congress in 2020 to report back. iFixit and other repair advocates told the Commission then how manufacturers design products that frustrate repair and force owners to use the manufacturers’ branded repair services, hurting consumers and stifling competition. Manufacturers claimed the market was working fine, and that opening up repair access would undermine the safety and security of their products. Today’s report is a rebuke to their arguments.

The FTC’s long-awaited report provides a thorough analysis of broad market failures, and recommendations for government action to address those failures. Some major findings included in the report:

• Warranties are being routinely voided, in violation of the Magnuson Moss Warranty Act. “The Commission takes these allegations seriously and will continue to address illegal practices in the marketplace.”
• “[T]he burden of repair restrictions may fall more heavily on communities of color and lower-income communities.”
• “The pandemic has exacerbated the effects of repair restrictions on consumers.”

“This is a great step in the right direction,” said iFixit CEO Kyle Wiens. “The bi-partisan report shows that FTC knows that the market has not regulated itself, and is committing to real action.”

We’re glad to see the FTC acknowledge the scope of the problem, and the real harm to consumers. We’re also happy to see the FTC’s pledge to undertake enforcement and regulatory solutions to repair restrictions, and fully support them in doing so—these actions are long overdue.

The report concludes with a pledge for enforcement: “To address unlawful repair restrictions, the FTC will pursue appropriate law enforcement and regulatory options, as well as consumer education, consistent with our statutory authority.”

The US Federal Trade Commission is charged with protecting consumers and promoting competition—two things we desperately need when it comes to manufacturers’ repair restrictions. These restrictions routinely cheat device owners out of their warranties and repair rights, and independent repair shops are struggling to compete in a market shaped by manufacturers’ unfair practices. We’ve been asking the FTC to step up and take action for years, and with the release of “Nixing the Fix: An FTC Report to Congress on Repair Restrictions,” it seems they’re finally heeding the call.

The report summarizes the problems that consumers are facing from a variety of monopoly strategies. “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.”

None of those are news to regular iFixit readers, but it’s helpful to see the FTC identify all of these as a challenge across industries, from smartphones to automobiles.

Highlights and Reactions

One key takeaway from the report is the FTC’s finding that, despite their claims to the contrary, manufacturers’ repair restrictions just aren’t justified. The report analyses a number of manufacturer arguments about why they need to lock down our devices, and keep device owners and independent repair techs from fixing our stuff—and finds each of them sorely lacking.

Intellectual Property: Manufacturers routinely claim that providing repair information, parts, and tools will undermine their intellectual property rights and force disclosure of trade secrets. Here, the FTC echoes what we’ve said all along: “[W]hile it is clear that manufacturers’ assertion of intellectual property rights can impede repairs by individuals and independent repair shops, in many instances intellectual property rights do not appear to present an insurmountable obstacle to repair.”

With regard to trade secrets specifically, “information that manufacturers already share with authorized repair centers may not qualify for trade secret protection.” That might seem obvious, but we’re elated to see it laid down for the record.

Safety: At iFixit, we believe anyone can learn how to fix their devices safely and successfully, it’s why we do what we do! The FTC appears to agree. Just as we’re able to fix our cars or take them to an independent mechanic, “with appropriate parts, repair information, and training, consumers and independent repair shops would similarly be capable of safely repairing other products,” the report states.

The FTC also recognizes that manufacturers themselves are undermining safe repair and creating the very risks they’re allegedly concerned about: “By not making parts and manuals available to individuals and independent repair shops, and not including information in these manuals about the dangers of particular repairs, manufacturers may be exacerbating the very safety concerns they have raised.”

Cybersecurity: If you’ve watched a Right to Repair hearing in the last couple of years, you’ve no doubt heard manufacturers’ raising privacy and security hobgoblins to frighten lawmakers out of supporting Right to Repair laws.

The FTC makes short work of this argument, stating “the record contains 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 “with appropriate parts and repair information, the record supports arguments that consumers and independent repair shops would be equally capable of minimizing cybersecurity risks, as are authorized repairers.”

Liability and Reputational Harm: Just like their claims about intellectual property, safety, and cybersecurity, the FTC found manufacturers’ arguments about liability and reputation woefully deficient: “Manufacturers provided no empirical evidence to support their concerns about reputational harm or potential liability resulting from faulty third party repairs.”

The FTC’s refutation of these arguments is important, because these false claims have been successfully used by high-paid lobbyists to shoot down state Right to Repair bills.

The report also recognizes that manufacturers’ repair restrictions have a serious impact on racial and economic equity, noting “the higher cost of repairs disproportionally burdens Americans in financial distress,” and that “repair restrictions likely result in lower employment by local or independent repair shops….and difficulties facing small businesses can disproportionately affect small businesses owned by people of color.”

What Is The FTC Going to Do About It?

The report assesses a number of approaches the commission could take to address manufacturers’ repair restrictions. The commission will more aggressively enforce the Magnuson-Moss Warranty Act against those manufacturers who illegally void, or threaten to void, the warranty if the owner doesn’t use the manufacturer’s branded repair service or replacement parts. Immediately following the release of the report, the FTC asked consumers to start reporting these bad actors for committing fraud:

The report also endorses creating new rules under Section 5 of the FTC Act that would prohibit unfair repair restrictions. The Commission found that “given…the breadth of concern about and potential harm to consumers and markets from widespread repair restrictions” and the inadequacy of isolated enforcement actions, “the Commission may decide it is worth the investment of its energy and attention to pursue rulemakings in this area.” In other words, giving companies a warning or slap on the wrist after they create whole systems to deny people their right to repair is no longer working, and the FTC needs to outlaw these practices across the board. 

Finally, the Commission promises to support legislative efforts towards Right to Repair by pledging to work with lawmakers at the state and federal level to “to ensure that consumers and independent repair shops have appropriate access to replacement parts, instructions, and diagnostic software.” The FTC concludes that they want to make sure that “consumers have choices when they need to repair products that they purchase and own.”