Two Wrongs Don’t Make a Right to Repair
How State “Right to Repair” Legislation Harms Consumers and Innovation
Should you have the legal right to fix your own stuff? At first glance, the answer would seem like a simple “yes.” That simple answer is at the heart of the growing right to repair movement, a coalition comprised of repair enthusiasts and consumer advocates.
Yet, the right to repair movement is multifaceted and touches on a wide range of policy issues, from antitrust and copyright to environmental protection. Right to repair advocates claim that original equipment manufacturers (OEMs) hold a monopoly in the aftermarket for electronic device repair, which allows them to unfairly restrict the distribution of repair parts, tools, and documentation within proprietary authorized repair networks. Therefore, they argue, legislation is needed to require manufacturers to sell repair products to independent repair businesses outside of their own authorized networks.[i]
While right to repair advocates insist that such measures will help consumers and the environment, the model legislation and current state right to repair bills threaten to break the existing repair market for electronics, leading to higher prices, lower quality products, and less innovation.
In June 2022, New York lawmakers passed the first right to repair law covering digital products, the Digital Fair Repair Act (S4104; A7006B), which would require electronic device manufacturers to sell and distribute diagnostic material, replacement parts, and repair tools to users and independent repair providers.[i] New York Governor Kathy Hochul signed a modified version of the legislation on December 28, 2022.[ii]
The New York bill is premised on the Model State Right-to-Repair Law, entitled the “Digital Right to Repair Act.”[iii] Advocates have been pushing the model legislation for nearly a decade, and versions of the bill have been introduced in at least 43 different states, targeting various forms of digital equipment. [iv]
Advocates claim that the legislation is necessary to restore people’s right to repair their electronic devices. However, consumers already have that right. Today, the market provides alternatives to OEMs’ authorized repair networks, and consumers choose to use those alternatives every day. The model legislation put forth by the Repair Association is a solution in search of a problem, and the harms of the proposals will outweigh any potential benefits.
The first part of this paper outlines three problems with the model Digital Right to Repair Act. Specifically, the legislation will:
- Raise prices for consumers;
- Disincentivize innovation; and
- Undermine property rights.
The second part of this paper debunks two claims often made by right to repair advocates, that:
- There is a monopoly in the repair aftermarket; and
- Planned obsolescence is a significant obstacle to repair.
Three Problems with the Model Right to Repair Law
The Model Legislation Will Raise Prices for Consumers.
Policy making is often viewed in a vacuum, disregarding unintended consequences that are likely to result. If people are poor, increase the minimum wage. If something isn’t affordable, subsidize it. However, policy makers’ intentions don’t matter nearly as much as the incentives they create. And good intentions can often lead to bad incentives. That is certainly the case with right to repair legislation as it is being proposed.
The claimed effectiveness of right to repair legislation is based on the assumption that there is a significant distinction between the markets for equipment and the aftermarkets for the service and repair of that equipment.[v] Proponents of right to repair legislation overlook the possibility that government intervention in the aftermarket for repair services will ultimately lead to counterproductive effects in the manufacturing and sale of electronic goods.
Industries affected by repair mandates are likely to respond with product and manufacturing decisions that help maintain their bottom line. Moreover, government regulation also comes with compliance costs which will be passed on to consumers in the forms of higher prices, lower quality products, or both.
The Model State Right-to-Repair Law has two main provisions.
Section 3(a) requires electronic equipment manufacturers to sell documentation, parts, and tools used during the course of repair. It states:
For digital electronic equipment and parts for such equipment that are sold or used in this State, an original equipment manufacturer shall make available to any independent repair provider and owner of digital electronic equipment manufactured by or on behalf of, or sold by such original equipment manufacturer, on fair and reasonable terms, any documentation, parts, and tools, required for the diagnosis, maintenance, or repair of such digital electronic equipment and parts for such equipment, inclusive of any updates to information.[vi]
Section 3(b) requires manufacturers to provide disabling tools for embedded security locks to device owners or independent repair providers upon request. It states:
For equipment that contains an electronic security lock or other security-related function, the original equipment manufacturer shall make available to any owner and independent repair provider, on fair and reasonable terms, any special documentation, tools, and parts needed to access and reset the lock or function when disabled in the course of diagnosis, maintenance, or repair of such equipment.[vii]
Some industry representatives have raised concerns over data security and cybersecurity regarding the mandates imposed by these provisions. The Security Industry Association (SIA) made this point in opposition to New Hampshire’s 2019 version of the Digital Fair Repair Act (H.B. 462).[viii] In a February 2019 letter from to the chair of the New Hampshire House Commerce and Consumer Affairs Committee, SIA Government Relations Manager Drake Jamali pointed out the wide array of devices that would be affected by the bill—including video cameras, carbon monoxide detectors, and fire alarms—and argued that the bill would force manufacturers to “release embedded software and security patches to independent repair providers which could compromise the cyber security of electronic equipment connected to an IP network.”[ix] Lawmakers should not overlook these security implications.[x]
The legislation is expected to cut into manufacturers’ profits by decreasing revenue from their own repair services and lowering the volume of new units sold. One should expect manufacturers to raise prices on consumers to account for this profit loss.
The Digital Right to Repair Act requires manufacturers to sell and distribute documents, parts, and tools that may or may not be required during the course of device repair. For manufacturers, compliance with the legislation will bring increased manufacturing and production costs. Therefore, to comply with that mandate, manufacturers will need to establish systems and processes to manufacture and distribute those repair products feasibly, efficiently, and profitably. That includes paying for costs involving research, design, development, and implementation of parts, documents, and delivery.[xi]
Further, the model legislation is likely to burden consumers with higher prices and lower quality devices as manufacturers react to the legislation’s mandates. A recent study published in the journal of Management Science found that attempts to make independent repair more accessible and less expensive, while well-intentioned, will likely have counterproductive effects. The authors conclude that right to repair bills “can create a lose-lose-lose situation that compromises manufacturer profit, reduces consumer surplus, and exacerbates the environmental impact.”[xii]
As the Management Science study notes, covered manufacturers are profit-maximizing firms, and right to repair legislation will likely prompt them to look for ways to mitigate profit loss.[xiii] Any costs associated with complying with this mandate will likewise contribute to higher prices for consumers.
The Model Legislation Will Likely Stifle Innovation for Various Products
The model Digital Right to Repair Act threatens to limit product innovation across numerous areas of product manufacturing. The legislation necessarily implies electronic devices must be repairable.[xiv] And the mandate to create a system to distribute repair tools, parts, and information could ultimately influence how manufacturers design their devices, leading to more standardization across product lines and less innovation. This, paired with the model legislation’s overly broad definition of “digital electronic equipment,” creates an applicable framework with no end in sight. It is important first to understand what kind of products will fall under the legislation’s purview.
A major flaw of right to repair bills is their broad definition of “digital electronic equipment.” The model legislation defines such equipment as “any product that depends for its functioning, in whole or in part, on digital electronics embedded in or attached to the product.”[xv] The primary intention is to target everyday consumer electronics, like cell phones, tablets, and personal computers. Proponents of the model legislation may also be interested in regulating the repair of other home electronics, like televisions and smart home devices. However, distinctly different industries, like home appliances, medical devices, and agricultural equipment have also been at the focus of advocacy as traditional products become more digital.
The first draft of the model legislation was inspired by a 2013 Massachusetts law that applied solely to motor vehicles, called the Act Protecting Motor Vehicle Owners and Small Businesses in Repairing Motor Vehicles.[xvi] In September 2022 testimony before the House Small Business Committee, Repair Association Executive Director Gay Gordon-Byrne said that she essentially took out “automobile” in the Massachusetts law and replaced each instance with digital electronic product.[xvii] The most current version of the model legislation, last updated in July 2022, and most of the versions introduced in state legislatures, contain an exception for motor vehicles.
Over 150 versions of the model legislation have been introduced in at least 43 state legislatures. A federal version, the Fair Repair Act (H.R. 4006; S. 3830),[xviii] was introduced in June of 2021 during the 117th Congress. Perhaps the most notable variation among the introduced bills is in covered industries. Along with motor vehicles, many of the bills exclude medical devices. These exclusions vary in specificity, but most refer to medical devices as defined under the Food, Drug, and Cosmetic Act.
Many states have introduced more targeted bills directed at a single industry. Arkansas, Florida, Kansas, Michigan, Nebraska, New York, North Carolina, Oklahoma, Rhode Island, South Carolina, Vermont, and Wyoming have introduced versions of the model legislation that are directed solely at agricultural equipment.[xix] Other states, like California, Colorado, Hawaii, and Texas, have done the same with medical devices. In 2021 California lawmakers introduced the Medical Device Right to Repair Act, which applies to “powered medical equipment.”[xx] Covered devices include those approved by the Food and Drug Administration that are “used in the treatment, monitoring, or diagnosis of a patient, and including assistive, adaptive, and rehabilitative devices.”[xxi] Colorado lawmakers, taking a narrower approach to medical devices, passed the Consumer Wheelchair Repair Bill of Rights Act (H.B. 22-1031),which was signed into law in June of 2022.[xxii] New York’s Digital Fair Repair Act is tailored more to consumer electronics, like smartphones, tablets, and personal computers.
The vast majority of the bills introduced use the broad definition of “digital electronic equipment” provided by the Repair Association’s model bill.[xxiii] Along with commonly owned consumer devices, the definition also applies to safety and security products like security cameras, carbon monoxide detectors, fire and smoke alarms, and alarm system panels. A wide array of products would fall under the model legislation: digital cameras, headphones, gaming consoles, printers, scanners, audio speakers, microphones, projectors, electric keyboards, instrument amplifiers, guitar tuners, coffee makers, microwaves, digital clocks, wrist watches, key fobs, baby monitors, landline telephones, barcode scanners, and ATMs.
Various digital products, and many not yet in existence, will face chilled innovation under the Model State Right-to-Repair Law. Traditional products continue to become more digitized as manufacturers attempt to create new and better products to attract consumers. The overly board definition of “digital electronic equipment” may persuade some manufacturers not to digitize some products in order to avoid having to comply with the law. The U.S. Copyright Office made this point in a 2016 report on “Software-Enabled Consumer Products.” The report states:
If the law provides more expansive legal benefits for certain types of products or software, manufacturers may have an incentive to reengineer their products to fit within those definitions. Conversely, if the law limits or eliminates legal benefits for other products or software, manufacturers may have an incentive to remove features benefiting consumers, or to add extraneous features that increase costs without providing corresponding benefits for the consumer. Creating these types of distinctions may discourage manufacturers from developing enhancements that could improve the efficiency of their products.[xxiv]
For example, take a common beauty appliance like a hair straightener—a product that has existed for over a century.[xxv] The market size for hair straighteners, also called flat irons, is valued at over half a billion dollars.[xxvi] Due to the high temperatures required for them to function, flat irons have been shown to be a significant cause of house fires.[xxvii] Manufacturers of hair straighteners have innovated in response by digitizing their products to include features that turn off these devices after a certain period of time of non-use, increasing user safety.[xxviii]
The potential of falling under a right to repair law could unnecessarily influence manufacturers to opt not to digitize their products. This is particularly true for small businesses, because smaller manufacturers may lack the capital and resources to both create innovative digital products and produce adequate repair documentation for distribution. [xxix] Small manufacturers may decide to limit or eliminate digital features in new products for fear of potential fines or litigation.
The Digital Right to Repair Act could further influence manufacturers to limit innovation and standardize their products to more easily comply with the law. The Computing Technology Industry Association (CompTIA) made this point in its September 2019 comments to the Federal Trade Commission’s “Nixing the Fix: A Workshop on Repair Restrictions.” In the comments, CompTIA’s Dileep Srihari and Alexi Madon note that the “demand for thinner and lighter devices has led to new, innovative, and lightweight designs,” and that “powerful functions are performed by ultra-thin devices where the battery is adhered to the product casing.” Under similar right to repair proposals, “a manufacturer may be required to revisit such designs because of long-term repair or liability.”[xxx]
In fact, battery replacements have become a contentious issue within the right to repair debate. Case Western Reserve University Law Professor Aaron Perzanowski points out:
Even worse, device makers can simply glue components together rather than use screws or other fasteners. Glue often makes it difficult to replace a single component without removing or damaging others. Some components, like batteries, are naturally less durable and more prone to failure than others. When firms design their products in ways that complicate the procedure for replacing these predictable points of failure, they increase the cost of repair.[xxxi]
The use of glue and adhesives have become commonplace in the construction of smartphones in response to consumer demand for more water resistant devices.[xxxii] While the use of sealants has created additional complexities in the repair of devices, these designs function to “resist the intrusion of dust and water into the internal electronics.”[xxxiii] Thus, manufacturers are faced with a trade-off: construct tightly sealed electronic devices to increase resistance to water and moisture, or construct devices with more easily replaceable batteries. Overemphasizing repairability could in turn make devices more prone to damage from drops and exposure to moisture.
The Digital Right to Repair Act threatens to chill innovation, as manufacturers modify product design to better comply with mandates on the distribution of repair materials in an economically efficient way. Marissa MacAneney, now a litigation associate at the law firm of Debevoise & Plimpton, wrote in her student note for the St. John’s Law Review that “Consumer demand, creative vision, and business considerations should drive which new products enter the free market, not rigid and arcane repairability legislation.”[xxxiv] The repairability of a particular digital product is just one consideration that consumers make when purchasing a device. The free market, not poor attempts at state central planning, should inform how best to design these products.
The Model Legislation Threatens Property Rights
At first glance, the meaning behind “right to repair” may seem obvious. According the Repair Association:
It’s simple. You bought it, you should own it. Period.
You should have the right to use it, modify it, and repair it whenever, wherever, and however you want. It’s our mission to make sure you can. We fight for your right to fix.
Property rights are important. Often discussed as a “bundle of sticks,” property rights come in different forms, like the right to use or the right to exclude.[xxxvi] A recurring problem in property law is discerning where one’s property rights end and another’s begins. As the old saying goes, your right to swing your arms ends at my nose.[xxxvii]
The model right to repair legislation implicates two important property rights: intellectual property and the freedom of contract. Right to repair legislation forces manufacturers to reveal trade secrets and implicates copyright protections afforded by federal law. It also would impost compulsory contracts between manufacturers and independent repair shops, forcing manufacturers to sell and distribute their private property.
Recent scholarship has pointed to right to repair bills’ incompatibility with federal copyright law. As Devlin Hartline and Adam Mossoff of the Hudson Institute put it, “state laws that conflict with federal copyright law are unconstitutional under the American system of federalism.”[xxxviii] Hartline and Mossoff point to “mixed signals” given by right to repair advocates in addressing their legislation’s inconsistency with copyright law. Yet, proponents of the model bills also tend to frame copyright as an unnecessary hurdle for repair.[xxxix]
Much of the discussion on copyright within the right to repair debate focuses on the Digital Millennium Copyright Act of 1998 (DMCA), a law meant to modernize copyright law to better adapt to an increasingly digitized economy. Section 1201 of DMCA prohibits the circumvention of digital security controls that prevent access to certain copyright protected works on the device.[xl] But the DMCA also allows the Register of Copyrights to grant exceptions every three years.[xli] In 2010, an exception was granted for “jailbreaking” smartphones, a process that allows users to sideload unauthorized applications onto their device. In 2014, the jailbreaking exception was also granted to tablets and smart TVs.[xlii] But the prohibition on “unlocking” security measures that control access to copyrighted works remains.
Regardless of how one views the public good of the protections and process provided by the DMCA, the Digital Right to Repair Act’s requirement to distribute documents and tools to bypass electronic security locks is clearly inconsistent with federal law. And there is doubt as to whether the mandate is necessary for ordinary repair needs. In light of DMCA exceptions already granted for diagnosis and repair, the Federal Trade Commission’s report on the right to repair concluded that “at present, the assertion of IP rights does not appear to be a significant impediment to independent repair.”[xliii]
The model right to repair law undermines manufacturers’ freedom of contract by forcing them to sell repair products to independent repair providers, regardless of whether a given shop has a history of bad service, poor data protection, or mishandling of intellectual property.
The distinction between positive and negative rights provides a useful lens through which to view these provisions in the context of the model legislation. Negative rights are those normally understood to involve the freedom from external constraints or impediments, like freedom of speech, the right to bear arms, and the protection from unreasonable searches and seizures.
Positive rights involve freedoms to which one is entitled, such as universal health care or public education and correspond to positive obligations. The right to health care obliges the state to provide funding to supply the goods and services to which that right implies access. It also often involves the state forcing private persons to enter into contracts to satisfy those obligations. This is not to say that all positive rights and obligations are bad. A company might provide roadside assistance services in which it voluntarily enters into a contract to take on the positive obligation to assist with a flat tire or dead battery in exchange for payment. The key distinction is whether a positive obligation is voluntary or coerced.
Right to repair proponents often frame their advocacy as a negative right: “let us fix our stuff.” But right to repair model legislation seeks to establish positive rights, in that it would give independent repair shops compelled access to manufacturers’ private property. While the right to repair movement masquerades as a property rights movement, it adopts a philosophy of “property rights for me but not for thee.”[xliv]
Debunking Misleading Right to Repair Claims
One would hope that ham-fisted attempts to interfere in the aftermarket for repairs would be supplemented by significant evidence and economic reasoning. However, this isn’t the case. To the contrary, existing data and information points to a thriving aftermarket repair economy that benefits manufacturers, small businesses, and consumers.
Manufacturers Have a Monopoly on Aftermarket Repairs. Right to repair advocates claim that there is a monopoly in the market for electronic repair. Nathan Proctor, U.S. PIRG’s Right to Repair campaign director, wrote back in 2018 that, “The main goal is to end a monopoly that manufacturers currently enjoy over the repair of electronics.”[xlv] These are essentially antitrust concerns, and the claims ultimately lack supporting evidence.
The electronic repair industry is comprised of several, often overlapping, markets for different devices. The cell phone repair industry is estimated to be worth $4 billion, with over 9,000 businesses.[xlvi] The demand for phone repair rose exponentially after Apple released the first iPhone in 2007, which likely explains why many electronic repair businesses—iFixit, uBreakiFix, and iCracked—were parodically named after Apple products.[xlvii] And the industry is expected to continue its growth.[xlviii] The electronic and computer repair industry is currently estimated to be worth $20 billion, with over 48,000 businesses in the U.S.[xlix]
According to an April 2021 report by the consulting firm IBISWorld, the cell phone repair industry is highly fragmented, with smaller businesses controlling most of it.[l] A 2021 survey by Consumer Reports—which favors right to repair legislation—found that not only do non-OEM repair solutions exist, but that consumers continue to choose to use them.[li] Regarding smartphones, the survey found that consumers utilize a variety of different outlets to repair their devices.
Consumer Report’s data on small and large home appliances paints a similarly competitive picture:
The increasingly digitized economy has created opportunities for both entrepreneurs and small businesses. This is particularly true in hardware repair, which has low barriers to entry.[i]
Some of the big names in independent repair began as small startups. A.J. Forsythe, a 29-year-old psychology major, started iCracked in 2010 in his Cal Poly dorm room. His company topped $25 million in revenue after four years.[ii] He sold his company to Allstate in 2019.[iii] Justin Wetherill, 21-year-old accounting student, and a cofounder started uBreakiFix in 2009.[iv] The company expanded to 47 stores with $27 million in revenue after three years, and now has 262 stores with nearly $100 million in sales.[v] Luke Soules and Kyle Weins founded iFixit in 2003.[vi] Their company makes 90 percent of its revenue selling parts and tools for repair and distributes repair guides.[vii] In July 2022, iFixit announced a $24.2 million investment to establish a new east coast hub in Chattanooga, Tennessee.[viii]
There is no discernable monopoly in the aftermarket for electronic repair. Manufacturers, authorized repair shops, independent repair shops, and other businesses operate in a highly competitive industry that has created tremendous value for consumers.
Planned Obsolescence Is a Significant Obstacle to Repair. Another claim made by right to repair advocates involves the concept of “planned obsolescence.” Planned obsolescence is used to describe intentional design features by manufacturers to shorten the lifecycle of a product for the purpose of pushing users to purchase new products.[ix] New York Assemblymember Patricia Fahy, a sponsor of New York’s Digital Fair Repair Act, said in June 2022, “So many of us have stacks of iPads or laptops or desktops in our basement because they’re not worth fixing because of the planned obsolescence so this really breaks the monopoly.”[x] The phrase has become a rallying cry for right to repair advocates, but the criticism ignores the cause of most electronic repairs: human error.
More often than not, users damage their devices due to mishandling before they become technologically obsolete. Smartphones are the most commonly owned electronic device in the U.S. and the one most affected by model right to repair bills.[xi] A 2021 report by the repair company uBreakiFix found that cracked and scratched screens are the most common damage incurred by smartphones by far.[xii] Damaged screens accounted for 56 percent of damaged smartphones. Two smartphone screens are cracked every second in the U.S., according to the report, and about 95 million smartphones are damaged by drops and falls every year. For laptop computers, falls and liquid spills are also the leading causes of damage.[xiii] The uBreakiFix report also found that users who previously damaged their smartphone are twice as likely to do so in the future.
Additionally, emerging research has presented another reason people break their smartphones: a new device is released. Two published studies, one in the Journal of Marketing Research[xiv] and another in the Management Science journal,[xv] found that users are more likely to lose or break their device when a new model is available. This suggests that consumers are more eager to replace their smartphone than right to repair advocates tend to acknowledge. And the findings coincide with the uBreakiFix report, which found that 59 percent of people would rather upgrade to a new device than have their old device repaired.
Right to repair advocates claim that consumers are unable to repair their electronics. In actuality, most consumers would simply prefer to upgrade and purchase a new device. The vast majority of consumers are content with the lifespan of their smartphone—73 percent, according to Consumer Report’s 2021 national survey.[xvi]
“Planned obsolescence,” as invoked by right to repair advocates, is a misnomer because consumers are far more likely to physically damage their devices before obsolescence. Even so, to the extent that planned obsolescence does affect a group of consumers, scholarly research has found that such product failures impact future customer purchasing behavior.[xvii] In other words, manufacturers lose out on repeat customers.
Companies like uBreakiFix, iFixit, and hundreds of other independent repair businesses already provide repair services, parts, tools, and manuals. The proliferation of high-end digital products has created demand for affordable repair services, insurance, and protective cases. And the free market works to meet that demand.
The Repair Association’s Model State Right-to-Repair Act ignores the realities of the electronic repair industry. Digital electronic products have become so affordable that repairs are often not economically convenient. This is not a problem, but a free market success.
Unnecessary government intervention in a thriving market should be avoided. Legislative proposals based off the model bill would do more harm than good by increasing prices for consumers, lowering the quality of devices, stifling innovation, and eroding property rights.