FTC concludes manufacturer repair restrictions harm consumers

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The U.S. Federal Trade Commission on Thursday issued a report on the so-called "right to repair" debate, suggesting repair restrictions put in place by companies like Apple negatively impact consumers and small businesses.

The report, "Nixing the Fix: An FTC Report to Congress on Repair Restrictions (PDF link)," was fulfilled at the direction of Congress and takes an in-depth look at the right to repair issue with a concentration on phone manufacturers and carmakers. Findings were issued to Congress with unanimous consent from the FTC.

"Many consumer products have become harder to fix and maintain," the report reads. "Repairs today often require specialized tools, difficult-to-obtain parts, and access to proprietary diagnostic software. Consumers whose products break then have limited choices. Furthermore, the burden of repair restrictions may fall more heavily on communities of color and lower-income communities. Many Black-owned small businesses are in the repair and maintenance industries, and difficulties facing small businesses can disproportionately affect small businesses owned by people of color."

Through a repair rights workshop, public comments, responses to a Request for Empirical Research and Data, and independent research, the commission found "there is scant evidence to support manufacturers' justifications for repair restrictions." As the FTC notes, there are certain provisions protecting consumer rights to repair without voiding warranty, but restrictions put in place by manufacturers have made it difficult to exercise those rights.

Specifically named in the report are physical restrictions like specialized nuts and bolts (such as Apple's "pentalobe" screws), use of glue to seal devices and soldering of components like RAM and storage onto motherboards.

Unavailability of parts, repair manuals, and diagnostic software and tools is also highlighted. Apple does not provide such material to facilities or individuals outside of its authorized repair network.

Other issues include designs that make independent repairs less safe (lithium-ion batteries), telematics, application of patent rights and enforcement of trademarks, disparagement of non-OEM parts and independent repair, software locks, digital rights management and technical protection measures, and end user license agreements.

Apple utilizes a number of the above mentioned strategies to thwart unauthorized repairs, including the use of software locks. For example, current iPhones pair parts like the screen and biometric hardware with onboard logic, meaning certain functions are made inoperable if a component is replaced without access to the correct diagnostics tools — even with OEM parts.

The FTC notes consumers, especially owners of expensive equipment like iPhone, show an interest in repairing their products over replacing them with a new model. As an example, the report points to a 2017 battery replacement program Apple rolled out in response to public outcry over an iOS update that artificially reduced processor performance on handsets with aging cells. In early 2019, Apple CEO Tim Cook revealed the company replaced 11 million batteries, some 9 million more than expected, and partially blamed a slowdown in iPhone sales on the program's success.

Other areas of the report cover antitrust and monopolization concerns, and the Magnuson-Moss warranty Act.

For its part, Apple maintains that expanded right to repair laws would expose industry secrets and could create security and safety issues for existing customers. The company contends its products should only be serviced by qualified technicians, a stance that irks third-party repair firms.

Conducting repairs through authorized outlets like Apple stores and vetted shops provides customers with a consistent experience, while an authorized repair network helps the company control and protect its various hardware platforms, Apple has said.

On the topic of quality of service, the FTC concludes that manufacturer claims are unfounded, as none could provide "empirical evidence to support their concerns about reputational harm or potential liability resulting from faulty third party repairs."

The FTC promises to "pursue appropriate law enforcement and regulatory options," foster consumer education and work with legislators on relevant issues.

Apple faces a number of state-level right to right to repair bills and has aggressively lobbied against such legislation. So far, none have been successful. Most recently, a Colorado bill was shot down in April for being too broad.