Monopolising Repair: A Critical Appraisal of the Right to Repair
[Aradhana and Yash are students at School of Law, CHRIST (Deemed to be University).]
In September 2021, Apple announced the release of iPhone 13 and its variations, but what went unnoticed by many was the change they made to their phone repair policy. This change effectively restricts consumers and third-party repair shops from replacing a damaged screen on Apple’s latest flagship device. According to the updated policy, replacing a display on any variant of the iPhone 13 flagship with even a genuine Apple display will render the “Face ID” non-functional unless special Apple tools are used to pair the display with the device. This is just another in a series of steps taken by manufacturers across industries, including automobiles, electronics, medical equipment, and military equipment, to inhibit the ability of end-users to repair or have their products repaired in an easy, timely and cost-effective manner. These practices have subsisted for decades, giving rise to the right to repair movement.
The right to repair movement
The right to repair is the right of consumers to be able to repair their devices or equipment and requires manufacturers to make devices more repair-friendly, make spare parts and tools more accessible and make information regarding repair procedures available to the public and independent repairmen.
The right to repair movement finds its origins in the United States of America, with the enactment of the Magnuson-Moss Warranty Act of 1975, which permitted consumers to use parts and services of any brand for their product repair if the warrantor did not offer them gratuitously. Over the course of the last half-century, there were a few scattered legislations and judicial pronouncements looking to curb unfair repair practices adopted by manufacturers. However, the movement only gained momentum in the last few years, and a significant leap forward was made in July 2021, through an Executive Order (EO) issued by President Biden, directing the Federal Trade Commission (FTC) to take action against practices limiting consumers' right to repair choices.
The movement seeks to curtail practices adopted by manufacturers that restrict the repair of products—restricting the sale of repair parts, using unique components requiring special tools to carry out repairs, withholding access to repair manuals and schematics and only allowing repairs by the original equipment manufacturers (OEM) or their authorised dealers, available at highly inflated prices. These practices force customers to buy new products as the cost of repair is often comparable to, if not more than the value of the product itself. Moreover, numerous companies have even admitted to and penalised for adopting the practice of planned obsolescence, where products are designed to stop being functional after a certain period, compelling the user to replace them with a new one.
OEMs in the digital industry use digital rights management (DRM) mechanisms in devices that allow them to control it. Through DRMs, the manufacturer can prevent unauthorised repairs or even trigger planned obsolescence, ensuring that only the manufacturer and his authorised dealer can perform repairs on the device. DRMs are protected under intellectual property law and cannot be circumvented to perform repairs.
OEMs have, in effect, monopolised the market for repair and servicing of their products by disallowing third-party repair shops and the consumers themselves from carrying out repairs or providing spare parts. They have deprived the right of consumers to choose who repairs their products and have imposed on them an unfair obligation to discard and buy new products periodically.
Legal framework adopted in different jurisdictions
The right to repair movement is beginning to receive attention from judicial and law-making bodies across the globe, and legislative action is being taken in many countries.
United States of America
The right to repair is, in some states, a legally enforceable right in the USA. The antitrust implications of restrictions imposed by OEMs were first observed by the Supreme Court in Eastman Kodak Co. v. Image Technical Services, Inc., 1992, where a suit was filed against Kodak for restricting the sale of patented repair parts and refusing to repair Kodak equipment purchased from independent shops. These restrictions were alleged to be violative of the Sherman Act and Clayton Act (American antitrust statutes), and the court agreed and held that such exclusionary conduct limited consumer choice of repair and was opposed to antitrust law. However, exclusionary conduct was held to be permissible in respect of patented parts, which were to be made available at a reasonable price. Recently, in the case of Impression Products Inc. v. Lexmark International Inc., 2019, Lexmark filed a patent infringement suit against Impression Products for circumventing its DRM mechanisms to repair and resell its products. Deviating from the earlier approach, the Supreme Court held that patent rights stood exhausted after the product had been sold and the patentholder was barred from imposing post-sale restrictions on them. Therefore, the use of intellectual property rights as a means to impose restriction on repair has been prevented by the US Supreme Court.
Legislative bodies have also started to legally recognise the right to repair, and bills for the same have been introduced in over 20 states. Section 5(h)(ii) of the EO passed by President Biden requires the FTC to investigate unfair and anti-competitive practices of manufacturers in the repair industry, which restrict customers from repairing the products themselves or getting them repaired by a third party.
The European Union enforced numerous regulations in March 2021 to increase consumer choice of repair for domestic appliances by encouraging manufacturers to make durable (10 years) and easy-to-repair products and allowing individual repairs. In respect of infringement of intellectual property rights by acts of repair, like the US Supreme Court, the European Court of Justice in Top Systems v. Belgium in October 2021 held that consumers have the right to reverse engineer and de-compile software if it does not function properly and such actions are not violative of the copyrights held by the manufacturer.
The legal framework in India currently does not expressly recognise the right to repair of consumers. A landmark decision of the Competition Commission of India (CCI) in the case of Shamsher Kataria v. Honda Siel Cars India Limited in 2014 addressed the anti-competitive implications of current repair policies. The case involved 14 car manufacturers investigated for violating Section 3 (anti-competitive agreements) and Section 4 (abuse of dominant position) of the Competition Act 2002. They had entered into agreements with dealers, requiring them to source parts only from the manufacturers or their authorised dealers. These agreements were held as anti-competitive by the CCI as they deprived customers of the choice of where they could get their vehicles repaired. It also held that the manufacturers had violated Section 4, i.e., abused their dominant position through their intentional restriction on the supply of parts to independent repairers, which amounted to a denial of market access, and enabled the manufacturers to monopolise the spare parts and servicing market. The CCI also clarified that manufacturers could not claim the protection of their intellectual property rights as a defence. The order was upheld by the Competition Appellate Tribunal but was stayed by the Supreme Court in 2018.
In the technology industry, however, one can even argue that the Indian legal framework facilitates manufacturers to adopt unfair repair practices. DRM software is protected under Sections 65A and 65B of the Copyright Act 1957, which impose criminal sanctions for the circumvention and interference with DRMs. While individuals can modify software for personal and non-commercial use under Section 52, repair shops are prohibited from circumventing DRMs for the lawful purpose of repairing their products.
The way ahead
The right to repair is beginning to gain recognition as a right that warrants enforcement; however, the Indian legal system seems to be falling far behind. The consumer protection and competition laws in India have made significant strides in the past two decades, but it is essential that they keep up with the needs of the day. An amendment to the Consumer Protection Act 2019 in line with amendments undertaken in countries like the USA and Canada must be enacted to recognise consumer right to repair and impose penalties on OEMs that partake in planned obsolescence or deny repairs at a fair price. The CCI needs to take proactive measures to identify OEMS entering into anti-competitive agreements that restrict repairs by individuals and independent repair shops.
It is also crucial to prevent manufacturers from lawfully implementing restrictions on repair by way of DRM mechanisms. While DRM software warrants protection, such protection must be lifted for the purpose of repairs by creating an exception under the Copyright Act 1957. Such exceptions have already been created in Canadian copyright law, the USA in the Impression Products case and the EU in the Top Systems v. Belgium case.
In the interest of consumers and fair competition, a legislative framework for the right to repair must be enacted, and requisite amendments need to be made to copyright and consumer protection laws to prohibit unfair practices by manufacturers. In a country that aims to realise social welfare, recognition and enforcement of the right to repair is a necessity.