WASHINGTON, D.C. — The Federal Trade Commission (FTC) has published a report on "anti-competitive" repair practices in the automotive and other industries that concludes "there is scant evidence to support manufacturers' justifications for repair restrictions."
The 56-page report, "Nixing the Fix: An FTC Report to Congress on Repair Restrictions," explores means of expanding consumers' repair options and how the Commission could assist in that expansion, consistent with its statutory authority.
In addition, the FTC notes that it stands ready to work with lawmakers, either at the state or federal level, to ensure that consumers have choices when they need to repair products they purchase and own.
The FTC submitted this report, as requested by Congress in the 2021 Financial Services and General Government Appropriations Bill, to the House and Senate Committees on Appropriations regarding anticompetitive practices related to repair markets.
The Auto Care Association (ACA), which has championed Right to Repair (R2R) issues for the past several years, applauded the FTC's "efforts to secure right to repair legislation both on a state and federal level" and said it hopes this report "will be the beginning of increased efforts by the commission to join us in addressing the anti-competitive actions of vehicle manufacturers."
"We fully support the FTC's efforts in ensuring that consumers continue to have choices on where they have their vehicle repaired," ACA President and CEO Bill Hanvey said in a prepared statement.
"We are pleased that the commission listened to the testimony from our association, as well as the other groups, during the 2019 'Nix the Fix' hearing and took into consideration the information that we submitted to the agency over many years," Mr. Hanvey said.
The FTC held hearings in July 2019 in Washington under the "Nixing the Fix: A Workshop on Repair Restrictions" umbrella. The workshop featured panelists from government, industry and professional associations, addressing how manufacturers may limit repairs by consumers and repair shops and whether those limitations affect consumer rights under the Magnuson-Moss Warranty Act.
Congress directed the FTC to issue the report, noting that it "is aware of the FTC's ongoing review of how manufacturers — in particular mobile phone and car manufacturers — may limit repairs by consumers and repair shops, and how those limitations may increase costs, limit choice, and impact consumers' rights under the Magnuson-Moss Warranty Act."
Congress directed the FTC to include recommendations on how to address these problems with the most impact. The Commission voted 4-0 to authorize staff to send the report to Congress.
In the study's introduction, the FTC said its concern with repair restrictions dates back over 40 years to when the commission's then-chairman testified in favor of the "anti-tying provision" of the Magnuson-Moss Warranty Act.
The anti-tying provision prohibits a warrantor of a consumer product from conditioning its warranty on the consumer's using any article or service which is identified by brand name unless the article or service is provided for free or the warrantor obtains a waiver from the Commission. This provision, for example, bars an automobile manufacturer from voiding a warranty if a consumer has scheduled maintenance performed by someone other than the dealer.