The Federal Trade Commission (FTC) voted on Wednesday (July 21) to strengthen restrictions against policies that push consumers to use licensed dealers to repair products; everything from iPhones to farm equipment.
The policy statement the FTC unanimously adopted today makes the so-called “right to repair” issue a priority, following a report released in May showing that companies use a variety of tactics to dissuade consumers from seeking repairs by third parties, who often charge less than dealers. These practices — which include license agreements and denigrating spare parts that don’t come from the manufacturer — have been called anti-competitive by critics.
In the report, the FTC says repair restrictions hurt small businesses as well as consumers. As PYMNTS reported in May, the thinking here is that repair businesses are unable to compete when companies put out products that aren’t easily fixed (or can’t be fixed in an economical fashion). This lack of choice can inflate repair prices to a place where it’s cheaper to just buy a new product.
The report uses the example of Apple, which has stringent rules for independent computer repair shops that want to work on iPhones, MacBooks and other devices. These stores could face random inspections and audits for up to five years.
FTC Chair Lina Khan said in the press release today that the FTC would pursue the issue with “new vigor.”
“These types of 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,” Khan said.
The five FTC commissioners — three Democrats and two Republicans — are also due to vote on whether to rescind a 1995 policy statement dealing with mergers. Should they rescind the statement, “a company that had been stopped from proceeding with one merger must give prior notice to the FTC if it is contemplating a similar transaction,” Reuters said. The commission would then be able to halt the transaction without needing to launch a months-long investigation into the new merger.
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