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‘Right to repair’ law may run into the changing definition of ‘ownership’

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By Wallace Witkowski

If you buy something today, what exactly are you buying? The answer could determine the path of a push to give Americans the “right to repair” possessions they have purchased.

For instance, if you buy an album on Apple Inc.’s /zigman2/quotes/202934861/composite AAPL +2.19% iTunes because you would rather “own” it than listen to it on a streaming service like Apple Music or Spotify Technology SA /zigman2/quotes/207488629/composite SPOT -1.71% , it isn’t the same as buying a physical vinyl record, tape or CD. You’re only buying a digital license to the IP with its own rules as dictated by the contract you enter into with Apple.

That notion of a continuing contract between buyer and seller instead of the purchase of a physical good has become contentious with the rise of the right-to-repair movement. The intention is to give consumers the right to repair a product if it breaks, instead of being forced to buy a new one or pay the original manufacturer to repair it.

President Joe Biden has advocated for a consumer’s right to fix a purchased product as they see fit, and a House bill was introduced in June requiring original equipment manufacturers to supply “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.”

Read: Federal regulators see fighting monopoly power as critical consumer-protection tool

A Federal Trade Commission report released in June concluded that “there is scant evidence to support manufacturers’ justifications for repair restrictions.” The FTC is investigating the matter, as Biden requested in one of the most prominent executive orders issued early in his presidency .

There have been prominent examples of manufacturers selling expensive products and refusing to allow independent repairs on them. One of the most commonly cited examples has been John Deere & Co. /zigman2/quotes/207941296/composite DE -3.12% , because farmers sued the farm-equipment maker for access to the software that ran their tractors and harvesters so they could repair the equipment. Recently, Deere said it supported a customer’s right to ownership and repair and that less than 2% of all repairs required a software update.

Another prominent example is Apple, which reserves the right to not sell parts and tools to repair personnel who do not work at Apple’s retail stores, and voids consumers’ warranties if they try to repair their own broken iPhones or MacBooks.

The issue, however, is a lot more widespread.

“Every industry has its Apples and its John Deeres, usually some dominant major manufacturer, but it’s in every industry,” Gay Gordon-Byrne, director of The Repair Association, told MarketWatch in an interview. “And there’s many, many more times bad guys than good guys.”

The Repair Association is a consumer advocacy group that grew out of the Motor Vehicle Owners’ Right to Repair Act passed in Massachusetts in late 2013, which required auto makers to supply repair shops and car owners with documents and information needed to make a repair. While right-to-repair for autos has not become law on a national level, the Massachusetts law prompted major auto makers to honor the state law on a national level through industry groups like the Alliance for Automotive Innovation and Autocare Association. The Massachusetts law was updated in 2020 through a referendum to include electronic vehicle data.

Notably, Tesla Inc. /zigman2/quotes/203558040/composite TSLA +5.09% is absent from these associations, which were formed before the electric-car maker rose to its dominant position. More important, signatories involved car makers that have dealerships, and Tesla has argued it does not have “dealers.” Still, given Tesla’s reliance on software and a closed computerized ecosystem to run their cars, the company doesn’t seem too interested in joining the right-to-repair movement.

While some consider Teslas to pretty much be “iPhones on wheels,” that characterization sums up where a lot of the gray area remains on the right-to-repair debate: As products become more and more complex, where lies the boundary between being able to own a product unconditionally and do whatever you want with it, and purchasing the use of a product that carries with it a contractual obligation between seller and buyer that’s meant to protect both parties from harm and/or litigation?

Repair monopolies are easy for companies: Just do nothing

Consumer tech companies, especially those that make hardware like smartphones and PCs, have been a major reason why the right-to-repair movement has gained steam. In recent years, Apple has become a prime target in that it chooses who gets to repair your iPhone or MacBook and does not release parts or know-how to unauthorized parties. Apple has been criticized that its Genius Bar — after waiting to get an appointment — often charges close to or as much for a repair than what it would cost for a new product, when an independent repair shop often would be able to make the repair for less if parts and manuals were available.

Recently, The Wall Street Journal tried to get two water-damaged Apple laptops — a 2017 MacBook Pro and a 2020 MacBook Air — repaired . While independent repair shops were able to fix the 2017 machine for about a third of what Apple was charging, the 2020 model couldn’t be fixed because of a lack of parts or information, and Apple was charging about as much to repair it as it would to buy a new one.

“Repair monopolies, they’re just easy, manufacturers do nothing,” Gordon-Byrne told MarketWatch. “They have to do absolutely nothing to monopolize repair, which is why they all do it, because if your shareholders are saying ‘How come you’re not making more money here?’ the easiest thing you can do is ‘Well, I can fix that: I just won’t sell any parts, I won’t sell any tools, I’ll make everybody come to me for everything,’ and that’s where we are.”

Apple, however, went on the record before Congress In November 2019, telling to a House Judiciary Committee probe that it actually lost money on repair services: “For each year since 2009, the costs of providing repair services has exceeded the revenue generated by repairs.”

/zigman2/quotes/202934861/composite
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$ 160.24
+3.43 +2.19%
Volume: 87.41M
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P/E Ratio
28.58
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0.55%
Market Cap
$2572.69 billion
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$2.38M
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/zigman2/quotes/207488629/composite
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$ 246.60
-4.29 -1.71%
Volume: 1.34M
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P/E Ratio
N/A
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N/A
Market Cap
$47.10 billion
Rev. per Employee
N/A
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/zigman2/quotes/207941296/composite
US : U.S.: NYSE
$ 348.09
-11.21 -3.12%
Volume: 2.90M
Nov. 29, 2021 4:00p
P/E Ratio
18.33
Dividend Yield
1.21%
Market Cap
$111.41 billion
Rev. per Employee
N/A
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/zigman2/quotes/203558040/composite
US : U.S.: Nasdaq
$ 1,136.99
+55.07 +5.09%
Volume: 19.18M
Nov. 29, 2021 4:00p
P/E Ratio
368.15
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N/A
Market Cap
$1086.53 billion
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$445,694
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