‘Right to repair’ advocates likely to fail at the FTC

Photo Credit: Getty

CEI submitted comments on a 53-page petition for rulemaking last week that asked the Federal Trade Commission (FTC) to promulgate rules “to protect consumer’s right to repair.” Submitted by US PIRG and iFixit, the petition garnered over 1,600 comments. And right to repair advocates, including those from US PIRG and the Repair Association, hand-delivered over 50,000 signatures of support to the FTC.

However, all of that effort will likely count for nothing.

The petition has a laundry list of problems. The biggest problem is that it doesn’t follow the FTC’s rules for petitions for rulemaking that are meant to promote public debate and transparency.

Under 16 C.F.R. § 1.31(b)(2), the FTC requires petitions for rulemaking to include “[a] full statement of the action requested by the petitioner, including the text and substance of the proposed rule or amendment.” (emphasis added). While the petition for rulemaking may include the “substance” of a rule, it does not include the “text” of the proposed rule. Therefore, CEI argues that the petition should be denied in whole.

As we explain in our comments:

Inclusion of the text of the proposed rule allows the public to better participate in the petition for rulemaking process. When the FTC voted to make changes to the petition process in September 2021, former commissioner Rohit Chopra said, “[u]nfortunately, Commissioners spanning multiple administrations pursued a more secretive and less accountable policy . . . .” Further, former commissioner Chopra said, “This is another important step to be more transparent, to promote democratic debate, and to rebuild trust in the Federal Trade Commission.”

It would be inappropriate for the FTC to grant this petition in whole or in part, because the public would not have an adequate opportunity to comment on the text of the rule that Petitioners are requesting the FTC to promulgate. This would degrade the trust the Commission sought to rebuild and be contrary to the type of democratic debate that the Commission intended to promote when adopting 16 C.F.R. § 1.31.

The petition asks the FTC to engage in both “unfair or deceptive acts and practices” (UDAP) rulemaking and “unfair methods of competition” (UMC) rulemaking under Section 5 of the FTC Act. But the FTC lacks the authority to promulgate substantive rules on unfair methods of competition. Last year, for the first time in 50 years, the FTC initiated UMC rulemaking in an attempt to prohibit non-compete clauses in employment contracts. CEI likewise submitted comments on that proposed rule arguing that the FTC lacks this authority.

US PIRG and iFixit ask the FTC to mandate repairability score labeling on products, numbered from one to ten, that would inform consumers on how repairable a device is. Based off the highly subjective criteria that they propose, the repairability scores would likely be unconstitutional as prohibited compelled commercial speech. The scoring system would also be useless and misleading in light of constantly changing software and supply chain issues.

Even worse, the petitioners ask the FTC to prohibit certain design features that help manufacturers create durable and long-lasting products. This would have the effect of making products more breakable.

That would be a boon for at least one of the petitioners. iFixit is an independent repair company that sells parts and tools. The petition states that “phone repair businesses find their income dropping because ‘ever-more tempting deals to customers to trade-in their old products for shiny new ones.’” CEI responded to this in our comments saying:

Petitioners say this like it’s a bad thing. But many argue that trade-ins help the environment. And Petitioners discuss the asserted environmental impacts of e-waste at length in their petition. This particular point illustrates the self-interested nature of the Petition. What may be good for repair shops, may not be good for consumers and the environment. For instance, products that seldomly break would be bad for repair shops, but good for consumers and the environment.

The FTC should have no problem denying the petition in whole due to its failure to comply with 16 C.F.R. § 1.31(b)(2). Even so, the policies advocated for by US PIRG and iFixit are misguided and represent a lack of appreciation for economics and engineering. Consumers would ultimately be worse off if their proposals were adopted.

Read the entirety of CEI’s comments on the petition for rulemaking here.