The Circular Economy and the Bipartisan Movement to Create a Legal #RightToRepair
In 2019, under the administration of former President Donald Trump, the Federal Trade Commission began to explore the ways that manufacturers make it harder for consumers and independent repair shops to fix broken products. In May 2021, under the administration of President Joe Biden, the FTC released its findings to Congress. In its report, “Nixing the Fix,” the agency highlights the environmental and economic harm that has resulted from the ways that manufacturers discourage consumers from repairing broken products as a means of increasing revenue — calling on Congress to create federal regulations to prevent these manufacturers from doing so.
The FTC report comes amid a growing movement to that create a legal right to repair ensuring that manufacturers cannot interfere with — and, in fact, must facilitate — the ability for American consumers to pursue affordable repairs to the products they own, rather than discarding them and contributing to the 254 million tons of trash that the United States produces every year.
As part of our movement to surface solutions for a more Circular Economy, NationSwell spoke to Aaron Perzanowski, an intellectual property lawyer who is the nation’s leading legal expert on fair repair laws. Here’s what he had to say.
NationSwell: What is the right to repair, and why do consumers need that right?
Aaron Perzanowski, Right to Repair legal expert: So sometimes, you run into a problem where you need a particular piece of software or information in order to repair a device. For instance, if you have a busted optical drive on your PlayStation, you can’t just go buy a new optical drive and swap it out because the optical drive is paired with the motherboard on that device; you need special software in order to install a new one.
Right to repair laws would require manufacturers to provide repair shops, repair providers and consumers with all the parts, software, and information they need to actually fully repair the products that people own — in this instance, the special software you’d need to install a new one.
When people talk about the right to repair movement, they sometimes focus on these state legislative proposals that have been introduced in some 30 states across our country this legislative year. In some states, those legislative efforts are focused on consumer electronics, like video game consoles and smartphones; in other states they’re focused on agricultural equipment; in California, the bill is focused on medical equipment.
I think those are important laws; I support them. I’ve submitted testimony in various states to express support for those bills, but they’re just one piece of a much broader right to repair agenda. And that broader agenda is premised on the recognition that we as consumers, we as individuals, have an inherent legal and moral right to make use of the products that we buy — to exert control over the things that we own. And part of what it means to get the full use out of the products you buy is the ability to fix them if something goes wrong.
And historically, that has been the case. What we’ve seen over the last 20-plus years, is a set of increasingly aggressive restrictions on repair. Those include the way a product is built, what components are used, how they’re put together, the physical design, and then you layer on top of that software restrictions that lock people out of certain aspects of their devices and make it difficult, if not impossible, to repair them. And then you’ve got a number of market strategies, where companies charge very high prices for repair as a way to discourage people from repairing and encourage them to buy something new. You see companies that refuse to sell parts to third parties. You see authorized repair programs to control how many competitors are out there in the repair market. And the broader right to repair movement is focused on reestablishing this basic right of consumers to control the things that they own.
NationSwell: You mentioned increasingly aggressive restrictions. Who or what is restricting repair?
Perzanowski: Restrictions come in a number of ways. Sometimes it’s as simple as the way a product is constructed. So, take Apple’s AirPods, their wireless headphones. They’re designed in a way that makes them nearly impossible to repair. They’re fairly simple devices: It’s a headphone, and it’s a battery. And the thing that goes bad is the battery. You spend hundreds of dollars on AirPods, and for some people, six months, 12 months later, they can only hold a charge for 15 or 20 minutes. And because of the way they’re built, that battery is not user replaceable. The battery isn’t even replaceable by Apple. If you take it in for repair two weeks after you buy it and say, “Hey, the battery is busted on this thing,” they don’t fix it. They just give you a new one. And then they pay some recycler to shred those devices and recover whatever raw materials they can.
But Apple actually has to subsidize the recycling of those air pods, because it’s not cost-effective to actually go through that process — unlike a laptop, where it actually has some scrap value.
Software is also a big piece of this. So one of the biggest vendors here is John Deere. A John Deere tractor has dozens of computers in it. They’ve got all these electronic control units that control various aspects of this machinery. Let’s say you need a new turn signal for your John Deere tractor. You go out and buy a new turn signal assembly, and it’s authentic — it’s the real John Deere parts — and you replace it yourself, or you have your local mom and pop repair shop replace it.
Even though it’s authentic, even though it’s installed properly, it won’t work until a John Deere technician comes out with a laptop and blesses, authorizes, initializes, whatever language they want to use, that part. They need someone to do this little software ceremony in order to get that machine working. And you’ve got to pay them to do that.
So that puts John Deere dealers at a competitive advantage over the independent shops, because the independent shops can’t actually get your machine up and running, even though they’ve installed the part correctly.
Those are two obvious ways that this happens, but there’s a whole range of softer interventions, like the way that that companies price repair parts. Apple won’t sell repair parts essentially to anybody outside of their own authorized repair programs. And if you sign up to be an Apple authorized service provider, then you’re only allowed to do the repairs that Apple tells you you’re allowed to do. That means you can do things like replace batteries or screens on phones, but anything more complicated than that — and in fact, some things that aren’t terribly complicated, like replacing a broken camera in an iPhone — and Apple actually prohibits you from making those repairs. You’ve got to send those devices to Apple.
By denying people access to parts or conditioning access to parts on them agreeing, basically, not to repair repairable devices, companies like Apple get to control the repair market.
NationSwell: I imagine that the time-gating of sending something as vital as a smartphone away for weeks to be repaired might also disincentivize consumers from seeking repair from manufacturers.
Perzanowski: Absolutely, and it’s really problematic. There are cases where time really is of the essence. Let’s say you’re a farmer and your tractor breaks down, and you’ve got a two week period to harvest your crops, and you live hundreds of miles away from the nearest John Deere dealer. You’re facing a serious time crunch.
John Deere is not trying to get you to replace your million dollar tractor every time something goes wrong, but they know that once you’ve dropped a million dollars on the tractor, they can charge you pretty much whatever they want for repairs and you’re going to pay them when your livelihood depends on it. So they see service as a profit center. They see a real incentive there to crack down on these repair markets. And that, of course, has some spillover effects on other kinds of interests in terms of not just consumer welfare, but also environmental concerns and competitive concerns.
NationSwell: What are the environmental implications of right to repair, especially with respect to building a circular economy? And what are the implications of right to repair for local businesses?
Perzanowski: Circularity is certainly a significant improvement over the linear models that we saw throughout the bulk of the 20th century. And look, we should give companies credit. They are making investments in a more circular direction. Apple’s got these fancy robots that can extract rare earth metals from the engines of cell phones. And I think companies recognize that at this point, there’s actually an economic advantage to sourcing raw materials from discarded devices rather than mining them from the earth. And there’s a market for that, given that some of them have to deal with the horrible PR around a lot of the mining practices for some of the inputs to these devices.
What the right to repair does that I think makes the move towards a circular economy even more effective is that, in very simple terms, it lengthens the lifespan of these devices. Instead of keeping your phone for 18 months, and then the screen breaks and you ask yourself, “Hey, is it worth buying a new one, or is it worth repairing the old one?” the right to repair, by creating a more competitive market for repair services, by creating a more competitive market for replacement parts, changes people’s economic calculus in a way that makes them say, “You know what? I’m going to fix my phone and I’m going to keep it for another year or another two years.”
So instead of keeping it for 18 months, maybe you end up keeping it for three years. So if we’re talking about a circle, we’re stretching the circle out here by enabling repair. And I think that has the potential to have a really significant impact. One, because for the individual consumer, it gives them this option that they don’t really have today. And I think over time it has the potential to change people’s attitudes and the kind of norms and expectations around what’s reasonable in terms of the lifespan of a device — and that normalizes the idea that actually things should last longer, and it’s not normal to toss your phone out every 18 months. So I hope that that would have some impact on behavior.
The right to repair does not necessarily translate into the choice to repair, but it is a kind of a necessary precursor. Right now there are people who want to repair, but can’t. And in the future, it’s not to say everybody’s going to repair all their devices all the time, but I do think that we would see a significant increase. And there’s some pretty good empirical research out there, some that I’ve done, some that the European Commission has done that really supports the idea that if people are given the option, if people are given the right information, that they will choose to repair their devices and choose to buy devices that are more repairable.
NationSwell: Earlier in our conversation, you mentioned 30 states that have Fair Repair bills moving through their statehouses. I imagine that that number means that this isn’t just a blue state vs. red state issue, but that there is actually bipartisan movement around right to repair regulations.
Perzanowski: Absolutely. If you look at who’s introducing these bills across the states, you see these bills introduced and supported by Democrats and Republicans. This is not in any meaningful sense a partisan issue. And it’s because I think the goals and principles underlying these bills speak to values on both sides of the political divide. So Democrats might look at this and see it as an important environmental regulation. They might see it as a way of protecting the interests of less wealthy citizens — poor people generally rely more on repair. And some Republicans look at this, especially libertarian leaning Republicans, look at this as a question of individual autonomy, of the sanctity of personal property rights. And both Republicans and Democrats will look at this as a way of, especially in the current climate, a way of pushing back on what are largely big tech companies. They’re not the only companies that are in this space — I don’t know that we normally mention John Deere in the same breath as Google and Facebook — but I do think that there is an opportunity to craft a bipartisan, trans-partisan coalition here around these issues.
The problem so far though has been that the resources and lobbying efforts of trillion dollar companies have been pretty effective at scaring state legislators away from these bills. We’ve seen a bunch of these bills introduced this year, almost as many the year before, almost as many the year before that. And so far, none of them have been enacted, with the exception of an automotive bill in Massachusetts first in 2012, and then there was an update to it just last year to incorporate telematics information that cars are transmitting.
The hurdle here has been a real asymmetry of resources. Consumers don’t have paid lobbyists, so it’s hard to get your arguments in front of these state legislators. I got involved at the legislative level because part of what I was seeing was a lot of what I think are bogus and misleading worries about intellectual property rights that companies, and their lobbyists, and their trade associations were introducing at the state level — worries that state legislatures hear and think “Oh, this is going to be preempted by federal copyright law, or this is going to destroy trade secret protection.”
They’re state legislators, most of them don’t know anything about federal IP law, and that sounds scary, and there’s no one there that they trust to correct that record. So I put together a group of a dozen or so IP professors from around the country who signed onto a letter that we submitted in over a dozen states just trying to make sure that the record was clear around those issues.
They hear a lot of really scary stories about how it’s dangerous to replace the battery in your phone, and if you do it wrong, the phone’s going to blow up, and they’re concerned their constituents are going to be harmed as a result of right to repair laws, and then the company that made it is going to be sued for some massive tort liability.
NationSwell: In 2019, under the Trump administration, the Federal Trade Commission started to look into right to repair laws. It’s 2021, and under the current Democratic administration, they published their report, “Nixing the Fix,” which at least one publication characterizes as “blasting manufacturers for restricting the right to repair.” The FTC issues the report to Congress, they make it available to the public as well, and they basically call for a right to repair to be established at the federal level. Do you find that encouraging?
Perzanowski: I find it very encouraging. Less that this Congress will move to pass a bill immediately, and more that the FTC just issued direct and unequivocal support for the idea that these restrictions on repair are harming consumers, and it’s signaling its willingness to engage in some enforcement. The FTC is incredibly powerful when it wants to be. It can really shape the way the market works. It can really shape the behavior that companies engage in when they are clear that they’re willing to flex the muscles that they have. And up until this point, they haven’t really in the repair space.
And while the FTC has the power to target unfair trade practices, but so does the attorney general of every single state. If the FCC says it’s a problem, then I hope that that helps get the issue on the radar of the state level enforcement agencies, too, especially as a quick thing they can reference to combat the fear-mongering that lobbying might be doing to prevent them from regulating that space. One state is going to pass one of these bills legally giving consumers a right to repair. Eventually, there’s going to be a crack in this wall. And we’ll see what happens at that point.
To learn more about why we need more investment in creating a circular economy, read our introduction to this series.