Is the “right of reparation” growing? | Butler Snow LLP

We previously covered the emergence of the so-called “Right to Repair” legislative movement, which seeks to grant consumers the right to modify and repair their own electronic devices, rather than relying on the manufacturer to make or authorize repairs with exclusive products. The move has garnered the support of several lawmakers in the United States, but is widely opposed by many product manufacturers. Since our previous article, there have been several notable developments regarding the movement, including the following:

  1. New York Senate approves Digital Fair Repair Act
  2. New York congressman introduces federal bill
  3. Executive Order of President Biden
  4. FTC unanimous vote

We will approach each in turn.

1. The New York Senate approves the Digital Fair Repair Act

On February 2, 2021, New York State Senator Neil Breslin introduced a bill called the “Digital Fair Repair Act,”[1] which was approved by the State Senate on June 10, 2021 and forwarded 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 repairers and consumers if those parts and repair information are also available to them. OEM authorized repairers ”.[2] The timing of this bill is unclear and it has yet to pass assembly and be signed by the governor to enter into force.

2. New York Congressman Introduces Federal Bill

Just days after the state bill was approved by the New York Senate on June 17, 2021, New York Congressman Joseph Morelle introduced a nearly identical federal bill. In his press release, Morelle promises: “This common sense legislation will help make technological repairs more accessible and affordable for items ranging from cellphones to laptops to farm equipment, finally giving individuals the autonomy they need. ‘they deserve.[3] He said the current process of going through original equipment manufacturers or an authorized supplier is too expensive or time consuming for the consumer, which has been exacerbated by COVID-19.[4]

The text of the legislation, otherwise cited as HR 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 must make available for diagnostic, maintenance or repair purposes such equipment , independent repairers or owners of such digital equipment. electronic equipment manufactured by or on behalf of, or sold or otherwise supplied by the original equipment manufacturer, on a timely basis and under just and reasonable conditions, documentation, parts and tools, including any updates updated information or embedded software.[5]

The text also includes an additional requirement for express warranties. If the original manufacturer made an express warranty and the wholesale price of the equipment is $ 100 or more, the manufacturer must provide such parts, tools or documentation to enable repair during the warranty period and a ” fair price and convenience of delivery ”in light of:

  1. Actual cost to the OEM to prepare and distribute the part, tool, documentation, excluding research and development costs incurred
  2. The ability of owners and independent repairers to purchase the part, tool or literature; and
  3. The means by which the part, tool or documentation is provided.[6]

This bill provides for two methods of enforcement. First, any violation will be treated as a violation of a rule defining an unfair or deceptive act or practice prescribed under Section 18 (1) (B) of the Federal Trade Commission Act.[7] The Commission may “prescribe any regulation it deems necessary for the application of this Act”.[8]

Second, state attorneys general have the power to bring an action under their consumer protection law or can bring a civil action in any court of competent jurisdiction.[9] The state may seek to prohibit other violations, enforce the law, obtain civil penalties, or obtain damages, restitution or other compensation on behalf of state residents.[10] The state is required to provide written notice to the Commission, “except in cases where such notice is not possible, in which case the Attorney General will serve such notice immediately after taking such action.”[11] The Commission then has the right to intervene, be heard and file appeals.[12]

This bill does not include an exception for security-related functions on devices. This means that for any device containing an electronic security lock or a security related function, the OEM is required to make available “through appropriate secure data distribution systems” the “special documentation, tools and parts. necessary to deactivate the interlock or operation, and to reset it when deactivated during diagnosis, maintenance or repair of the equipment.[13] However, the bill claims to protect trade secrets such as “[n]nothing in this Act shall be construed as requiring an original equipment manufacturer to disclose 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 as to how the FTC intends to protect these trade secrets.

The bill also provides that it would not interfere with agreements with authorized repair providers, unless those agreements limit the OEM’s obligations to comply with the Fair Repair Act. Such agreements would be null and void.[15]

This bill does not apply to motor vehicles or medical devices.[16]

3. President Biden’s Executive Order on Promoting Competition in the US Economy

On July 9, 2021, President Biden signed an executive order covering a variety of topics, including work, agriculture, transportation, internet services, and healthcare. The stated objective of the ordinance is to promote competition in the market.[17] As part of that goal, President Biden endorsed the concept of the right to repair and called on the FTC to draft new regulations limiting the ability of device makers to restrict independent repairs to their products.[18] However, President Biden’s order does not offer details on how to achieve these goals and which parties will be affected.

4. FTC vote

On July 21, 2021, the FTC hosted the open meeting of the Commission and voted unanimously to strengthen enforcement of repair restrictions that prevent small businesses, workers, consumers, and government entities from repairing their own. products.[19] FTC President Lina M. Khan said, “These types of restrictions can dramatically increase costs for consumers, stifle innovation, shut down business opportunities for independent repair shops, create unnecessary e-waste, delay timely repairs and undermine resilience… The FTC has a range of tools it can use to remove illegal repair restrictions, and today’s policy statement would commit us to move forward on this issue with new vigor.[20]

Globally

Although there have been many developments over the past year regarding the so-called right to reparation, there have still been no concrete steps for implementation. Any new regulation or enforcement action will likely meet intense opposition from several industries. However, it seems that the momentum for independent repair is increasing and therefore 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] Username.

[3] https://morelle.house.gov/media/press-releases/congressman-joe-morelle-introduces-fair-repair-act

[4] Username.

[5] HR 4006 (a).

[6] HR 4006 Sec. 2 (b) (1) – (3).

[7] 15 USC 57a (a) (1) (B).

[8] HR 4006 Sec. 3 (a) (2) (B).

[9] HR 4006 Sec. 3 (b) (1).

[10] Username.

[11] HR 4006 Sec. 3 (b) (2).

[12] HR 4006 Sec. 3 (b) (2) (A) – (C).

[13] HR 4006 Sec. 4 (1).

[14] HR 4006 Sec. 4 (2).

[15] HR 4006 Sec. 4 (3).

[16] HR 4006 Sec. 4 (4) – (5).

[17] See Executive Order on Promoting Competition in the US Economy | The White House.

[18] Username.

[19] https://www.ftc.gov/news-events/press-releases/2021/07/ftc-ramp-law-enforcement-against-illegal-repair-restrictions

[20] Username.

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