Written by Arbitrage • 2021-08-10 00:00:00
As software and other technologies get infused in more and more products, manufacturers are increasingly making those products difficult to repair, potentially costing business owners time and money. Makers of products ranging from smartphones to farm equipment can withhold repair tools and create software-based locks that prevent even simple updates, unless they are done by a repair shop authorized by the company. That can cost independent repair shops valuable business and countless labor hours sourcing high quality parts from other vendors. Farmers can lose thousands waiting for authorized dealers to fix malfunctioning equipment. And consumers end up paying more for repairs - or replacing items altogether that could have been fixed.
While it's difficult to put a dollar sign on how much the restrictions cost small businesses, the U.S. PIRG, a consumer advocacy group, estimates it costs consumers $40 billion a year. That averages out to $330 per U.S. family, who end up replacing broken phones, laptops, refrigerators, and other electronic instead of having them repaired.
Apple is a particularly heinous offender, spoken of on YouTube and other social outlets. A simple repair, such as an iPhone home button, isn't allowed by an unauthorized shop even if they have a brand new iPhone home button. Apple's software that calibrates different parts of a phone like the screen and battery is the problem. While techs can be certified by Apple to fix phones, shops that are not authorized Apple repair shops can't access the software or official part and repair the iPhone. Many independent repair shops opt not to get authorized because the terms can hamstring their business in other ways. Counterintuitively, Apple Authorization would force shops to decline 90% of the jobs that they do or lose the authorization.
The Federal Trade Commission recently signaled things might be starting to change when it adopted a policy statement supporting the "right to repair" that pledges beefed-up enforcement of current antitrust and consumer protection laws and could open the way to new regulations. For its part, Apple says its restrictions are in place for quality and safety concerns. They authorize technicians who pass a software and hardware exam annually. They also started an independent repair provider program in 2019 and say the latest iPhone 12 "allows for more repairs to be performed at more repair locations than ever before."
While Apple has been the most publicly in the crosshairs about the right-to-repair issue, all smartphone makers have similar policies. The issue spans other industries too. Farmers and farm equipment repair technicians complain they can't fix what should be fixable problems on tractors and combines due to the software installed by manufacturers. John Deere says it "supports a customer's right to safely maintain, diagnose and repair their equipment," but "does not support the right to modify embedded software due to risks associated with the safe operation of the equipment, emissions compliance and engine performance."