FTC Announces Two Right to Repair Measures as Legislative Efforts Continue | Kelley Drye & Warren LLP

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The FTC is focused on ensuring consumers have options when it comes to product repairs. In 2019 they organized a workshop to discuss manufacturer limitations on repair rights. In a 2021 report, they concluded that “there is little evidence to support manufacturers’ justifications for repair restrictions”. After that they gave a policy statement Call for more aggressive enforcement against manufacturers who impose these restrictions. Last week we may have seen the beginning of this enforcement.

According to the FTC, both Harley-Davidson and Westinghouse contained illegal terms that voided warranties when customers used anyone other than the companies and their authorized dealers to obtain parts or repairs for their products. For example, one Harley-Davidson warranty encouraged consumers to “insist that your Authorized Harley-Davidson Dealer use only genuine Harley-Davidson replacement parts and accessories in order to keep your Harley-Davidson motorcycle and its limited warranty intact.”

These types of restrictions violate the Magnuson Moss Warranty Act, which broadly prohibits businesses from making a consumer product warranty conditional on the consumer’s use of items or services identified by brand names, unless they are provided free of charge . However, companies can exclude the warranty for defects or damage caused by unauthorized parts or service.

Under the terms of the settlements, companies are prohibited from telling consumers that using third-party services or parts will void their warranties, or that they should only use branded parts or authorized service providers. In addition, both companies agreed to explicitly inform consumers about their rights. For example, warranties must disclose that “bringing your product to be serviced by a repair facility unaffiliated with or an authorized dealer of [Company] will not void this warranty. Also, the use of third party parts will not void this warranty.”

While the FTC has acted under applicable law, federal and state legislatures continue their efforts to pass legislation specific to the right to repair. For example, earlier this month New York passed the first “Right to Repair” law, requiring all manufacturers of “digital electronic devices” to provide consumers and repairers with the information, tools, and replacement parts necessary to repair covered devices.

Businesses that offer product warranties should review their warranty terms and associated notices to ensure they comply with the Magnuson Moss Warranty Act and evolving federal and state laws that specifically address the right to repair. We will likely see more such actions at the federal and state levels.

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