The Market Is Responding to Right-to-Repair Needs Without Legislation | Eastern North Carolina Now

    Publisher's Note: This post appears here courtesy of the John Locke Foundation. The author of this post is Kelly Lester.

  • There is growing demand for the right to repair technology, especially expensive farm equipment, without being compelled to use the manufacturer's licensed professionals
  • Consumers want to be able to repair their own property, while companies want to protect their intellectual property
  • Policymakers should be cautious about resorting to legislation, because the market is already responding to consumer demands for the right to repair, and legislation could potentially create unintended harms

    When you buy a smart phone, do you fully own it? The answer is: sort of. If you damage your phone, you might not be free to fix it yourself and keep its manufacturer's warranty. And this isn't just a smart phone issue; many tech companies require their customers to seek repairs either directly through the manufacturer or by a manufacturer-licensed repairer, or else risk violating the terms of the warranty or copyright law.

    Limiting who can provide service makes repair work more expensive and time consuming not only for consumers, but especially for technology-reliant professionals, including doctors, photographers, and particularly farmers. The latter rely on costly farm equipment for production, but if a tractor breaks down, they are not legally allowed to repair it themselves or seek third-party repairs. Instead, they must go through the manufacturer's licensed professionals, who may be hours away - making the interruption to their production schedule even worse.

    Even if the farmer were allowed to get it fixed by a third party, the equipment and information needed to repair the tractor might be impossible or extremely costly for a local specialist to get his hands on.

    Dueling property rights

    This problem has led to a significant movement for "right-to-repair" legislation, which would prevent manufacturers from imposing rules forbidding individuals who have purchased certain technological products from making repairs themselves or seeking repairs from third parties. Advocates for right-to-repair legislation, such as The Repair Association, summarize their goals into two areas: guaranteeing property rights and equal access.

    By "guaranteeing property rights," advocates mean that individuals own all elements of their purchase, which would allow them to repair their devices however they please. By "equal access," they mean that manufacturers should make information, parts, and tools publicly available for making repairs. In addition, companies would have to design products to be repairable.

    The main reason companies offer for opposing the right to repair is safety. Technology is getting far more complex, with smaller and more dangerous components. Should somebody suffer severe injury attempting to fix their technology, companies could be held liable and consumers could deem their products hazardous. Both would negatively affect brand reputation and sales.

    Another aspect is intellectual property. A lot of research and development (R&D) spending goes into creating a new piece of technology, which represents intellectual property the company wishes to protect under the law. But the equal access part of the right-to-repair movement would have companies make their intellectual property publicly available and affordable. Not only would this affect their intellectual property rights, but it also would affect investment in R&D.

    R&D investment would also be affected by people buying fewer new products. If people repair their products and hold onto it longer, they would be less likely to purchase the latest models, which means that investors would see fewer returns. Without as much R&D spending, there would be less innovation.

    A clear consumer need is also a market opportunity

    Government action on right to repair seems to be an obvious answer to the dilemma. After all, consumers should have complete ownership over their products.

    On the federal level, Pres. Joe Biden issued an executive order requiring the Federal Trade Commission to write up a plan to allow for the right to repair in the tech and agriculture sectors. Since 2014, 40 states have seen various right-to-repair bills proposed, but as of 2022 only New York had passed one into law (for electronic devices). In North Carolina, an early draft of the 2022 farm bill included right-to-repair language, but it was struck from later versions.

    On the other hand, companies should not be compelled to disclose valuable information, their intellectual property, in order to make self-repairs or third-party repairs possible. The legislative language in the 2022 farm bill would have required all manufacturers provide - at no charge - consumers and third parties the necessary information for repairs.

    While right to repair seems to call for legislation, it also presents a market opportunity. Consumers demand it, and because of that, companies are responding. The most significant example of this is John Deere.

    On January 8, 2023, with rising demand for the ease of repairing tractors and the threat of legislative overreach, Deere signed a memorandum of understanding (MOU) with the American Farm Bureau Federation in which Deere agreed to introduce - on their terms - the right to repair for farmers using their products. As part of this MOU, Deere has made its store technical manuals available for farmers and third-party repairers to purchase.

    In doing so, Deere may well receive a first-mover advantage. They are likely to raise their already high market share, and they have found a new revenue opportunity in meeting a clear consumer need.

    To compete with Deere, other tractor companies will now have to decide how to respond in a changing competitive environment. These pressures are likely to push other tractor companies into working on innovative ways to introduce the right to repair to their consumers, too.

    When faced with growing demand for a specific product, service, or solution to a problem, companies will adjust if economically feasible. This is exactly what is happening with the market for tractor repairs. People should have the right to repair their products, and companies should find ways to make it work.

    The market is responding. State policymakers should therefore be cautious about resorting to legislation, because even the most well-intended legislation can have severe unintended consequences.
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