Last Updated on July 9, 2022, 9:44 am ET
Today, President Biden issued an “Executive Order on Promoting Competition in the American Economy.” Among other provisions, the order aims to address anticompetitive terms imposed by manufacturers that restrict third-party repair or self-repair of consumer goods that are powered by software. The order encourages the chair of the Federal Trade Commission (FTC) to consider undertaking a rulemaking on “unfair anticompetitive restrictions on third-party repair or self-repair of items, such as the restrictions imposed by powerful manufacturers that prevent farmers from repairing their own equipment.”
Advocates in the right-to-repair movement have sought to relax manufacturer-imposed restrictions on repairs to farm equipment, phones, cars, video game consoles, medical equipment, and other goods that rely on computer software. The right-to-repair movement first gained momentum in the states. Massachusetts voters have repeatedly and overwhelmingly upheld that state’s right-to-repair initiative for automobiles. In 2019, at least 20 states introduced right-to-repair bills. This year, US Congressman Joe Morelle (D-NY) introduced the Fair Repair Act. In the current political environment in which states, Congress, and the FTC are increasingly focusing on competition, Biden’s executive order may be a useful precedent to address anticompetitive practices at the federal level, including practices that affect libraries.
To access most software, users must agree to end-user license agreements (EULAs), which often include restrictions on what consumers can do with that software. EULAs may include limitations on how or where users can repair or modify the software. For instance, in 2016, farm-equipment company John Deere included language in its EULA that requires users to return equipment exclusively to John Deere facilities for repair or replacement. This effectively creates a monopoly in the farm-equipment repair market; without the ability to search for independent repair shops that may be more convenient and less costly, farmers are beholden to whatever John Deere wants to charge—on top of the hundreds of thousands of dollars that farm equipment can cost to purchase. Repair restrictions may disproportionately affect communities of color and lower-income communities, in part because many Black-owned businesses are in the repair and maintenance industries.
One theory that challenges the enforceability of EULAs is the supremacy clause, which holds that the Copyright Act preempts the terms in these licenses that limit users’ rights. Another theory: license terms requiring consumers to exclusively use manufacture-authorized equipment and repair facilities may violate federal antitrust law.
In May, an FTC report to Congress found that “there is scant evidence to support manufacturers’ justifications for repair restrictions,” signaling support for consumers’ right to repair electronic goods. That report also explored the antitrust laws that the FTC enforces, which could make repair restrictions illegal. The FTC also indicated that one remedy to this problem could be a rulemaking to declare certain types of repair restrictions illegal.
In the report, the FTC noted that intellectual property rights are not an obstacle to repair, citing exemptions to the Digital Millennium Copyright Act (DMCA) that the librarian of Congress adopted in 2018 to allow for diagnoses, repair, or lawful modification of motorized land vehicles, smartphones, home appliances, or home systems. The DMCA prohibits circumventing digital locks, but the librarian of Congress adopts exemptions to those prohibitions every three years based on recommendations by the Copyright Office; the Copyright Office intends to recommend renewal of this exemption in the current rulemaking. Unfortunately, the FTC minimizes the burdensome nature of the triennial DMCA rulemaking process, particularly with respect to efforts to expand existing exemptions.
Our community advocates for balanced copyright, which means a copyright regime that protects rights holders as well as users while advancing the public good. As such, the Association of Research Libraries (ARL) and our partners in the Re:Create Coalition welcome the executive order for the role it will play in advancing the right-to-repair movement. Despite this executive order, the model of copyright holders using EULAs to limit research libraries’ ability to acquire, lend, and preserve e-books will persist until we find a solution.