When the Apple II personal computer was shipped in 1977, it came with a detailed manual for upgrading and repairing the device. Parts were readily available from Apple (and, later, other manufacturers), and if Apple owners didn’t want to fix or upgrade at home, they could find plenty of small, competitive repair businesses to do the work for them.
That was then. These days, Apple’s products arrive sealed shut, often with proprietary screws. Service manuals, circuit-board schematics and repair parts are reserved for Apple’s technicians, shops and a handful of “authorized” partners. With no access to parts, manuals or indie repair shops, consumers pay much more to keep their devices running.
President Joe Biden’s new executive order to promote competition encourages the Federal Trade Commission to end such anti-competitive repair monopolies. It’s a contentious move. Apple and the makers of other technological products from farm tractors to 35 mm cameras argue that their repair monopolies are good for consumers. But as these monopolies have grown, their toll on consumers, the environment and American productivity and innovation has risen. Biden’s recognition of a “right to repair” can help lower these costs and, at the same time, spur new kinds of growth across the economy.
Repair has always been a part of American life. The first prairie farmers had no option but to repair their own carts and plows. When mechanization came along, farmers became expert technicians -- so skilled that companies often consulted them on tractor designs. During the past 15 years, as computers have been integrated into expensive farm equipment, that relationship has broken down. The handful of remaining implement manufacturers make sure that only dealerships, with specialized software tools, can diagnose problems. Those same tools are often also needed to install parts and authorize repairs.
The costs to farmers can be significant. Paying a Deere & Co. dealership to plug in a computer to clear an error code on a tractor or combine can cost hundreds of dollars -- not including transporting the tractor to the dealership. Worse, by limiting access to crucial diagnostic and repair tools, manufacturers cause significant delays during harvest, planting and other busy periods. At certain times, a piece of equipment immobilized for even a few hours can cost a farmer thousands of dollars.
As farmers lose money, farm manufacturers with parts and service businesses profit handsomely. From 2013 to 2019, Deere & Co.’s annual sales of new equipment declined 19 percent, to $23.7 billion, while sales of parts increased 22 percent, to $6.7 billion. Harvester manufacturers aren’t the only ones who’ve spotted a growth market in restricting access to repair. In 2019, Apple’s Tim Cook conceded that lower-cost iPhone battery replacements had negatively impacted new iPhone sales. More expensive repairs, on the other hand, lead customers to think they may as well buy a new phone.
That’s bad for the buyers of Apple’s expensive new phones and even worse for lower-income consumers who rely on secondhand devices. Lack of competition in repair markets raises the cost of owning older devices, and ultimately accelerates their untimely, wasteful disposal.
The first calls to roll back manufacturer restrictions on repair, in the early 2010s, were focused on cars. But the problem now encompasses everything from phones to farm equipment. Since 2014, 32 states have considered “Fair Repair” bills. Earlier this year, the New York legislature became the first to pass one.
But manufacturers have pushed hard to defeat such legislation. In 2017, Apple warned Nebraska lawmakers that Fair Repair “would make it very easy for hackers to relocate to Nebraska.” TechNet, a trade group that represents Apple, Amazon and Google, has warned several states that Fair Repair legislation would somehow jeopardize the safety of devices. (TechNet did not respond to requests for examples of such consumer safety threats.)
The federal government has not bought these arguments. In May, the Federal Trade Commission reported that “many of the explanations manufacturers gave for repair restrictions aren’t well-founded.” Biden’s executive order now encourages the FTC to “limit powerful equipment manufacturers from restricting people’s ability to use independent repair shops or do DIY repairs.”
It’s a modest ask, especially in a country that lionizes self-reliance. Earlier this week, Steve Wozniak, a founder of Apple and the designer of the Apple II, publicly endorsed the right-to-repair movement, and noted that his -- and Apple’s -- success would never have happened if they hadn’t been able to engage in DIY tinkering. The Biden administration understands this lesson. US manufacturers need to relearn it.
Adam MinterAdam Minter is a Bloomberg Opinion columnist. -- Ed.
(Bloomberg)