Repair Monopolies Harm Consumers, Small Businesses, and Environment, Says New Report by Open Markets
April 13, 2020
Washington, DC – One of the most reckless profiteering trends in recent decades is dominant corporations’ use of repair restrictions to force consumers to use original manufacturers’ repair services. To document and address this issue, the Open Markets Institute today released Fixing America: Breaking Manufacturers’ Aftermarket Monopoly and Restoring Consumers’ Right to Repair.
This new report exposes a bevy of manufacturers’ design and legal tactics that prevent consumers, hobbyists, and small businesses from fixing things they paid for. This exercise of monopoly power in aftermarkets allows manufacturers to exclude independent parts manufacturers and technicians while extracting additional revenue during the lifespans of their products. Open Markets offers several policy solutions for lawmakers and regulators that take advantage of favorable antitrust precedents and other legal tools that regulators and consumers can use to reopen repair markets and rebalance power among dominant corporations, independent repair shops, and consumers.
“While our antitrust laws languish, dominant manufacturers have seized the opportunity to exert control over consumers by restricting repair. Corporate manufacturers force consumers to use only the manufacturers’ authorized repair services by withholding critical tools, guides, and parts. By restricting these aftermarkets, dominant manufacturers destroy opportunities for independent repair businesses. This reduces choice for consumers and degrades community and supply chain resilience, all in an effort to maximize revenue and eliminate competition in aftermarkets. Giant corporations such as Apple and John Deere are looting the pockets of everyday Americans – and the most sinister thing about it is that most people don’t even realize it’s happening,” said Open Markets Policy Analyst Daniel Hanley, co-author of the report.
Open Markets calls on federal and state agencies, as well as private plaintiffs, to use antitrust laws to break corporations’ monopoly power over aftermarkets. These well-established tools include enforcing consumer protection laws regarding warranties, creating exemptions in both copyright and patent law, creating strict rules prohibiting anti-competitive behavior, and using other precedents prohibiting exclusionary design, tying the sale of a product to its repair, and exclusive dealing.
Read the full report here.