FTC Highlights Burdens Placed by Repair Restrictions

“Furthermore, the burden of repair restrictions may fall more heavily on communities of color and lower-income communities.”

That sentence, which was prominently placed by the Federal Trade Commission in the Executive Summary of their report submitted to Congress last week, illustrates the priority the U.S. agency is placing on the inequities of perceived unfair manufacturer dominance of the product repair marketplace.

The FTC Report, “Nixing the Fix: An FTC Report to Congress on Repair Restrictions,” states that “Many Black-owned small businesses are in the repair and maintenance industries, and difficulties facing small businesses can disproportionately affect small businesses owned by people of color.” The report indicated that Right to Repair legislative advocates have previously highlighted the impact that repair restrictions have on independents and entrepreneurs from minority communities, and cited statements by certain members of Congress that supported 2006 legislation that passed a subcommittee and would have forced car companies to provide information about their vehicles to independent repair shops.

The discussion within the report focused on smart phones and laptops to show disparate impact, noting that lower broadband rates, and thus greater dependency on cell phones, among minority and low-income consumers and the pandemic highlighted dearth of laptops available in low-income communities as schools across America sought to provide virtual instruction.

The FTC referred to a recent Pew analysis that showed pandemic frustration had led to the introduction of 39 right-to-repair bills in 25 different states this year. Pew found that many of the legislative proposals were modeled on the Right-to-Repair Initiative overwhelmingly supported by Massachusetts voters in 2020. The implementation of that law is now delayed by pending litigation brought by the same manufacturers’ groups who campaigned heavily against the ballot measure.

Similar arguments regarding smart phones and laptops can be made in the automobile repair space as lower income car owners tend to drive less expensive, older vehicles that require repair with greater frequency and although these cars may not currently be equipped with modern ADAS features, it will not be long before “old cars” are the ones with the early technology.

The FTC posture on this point is clearly not without controversy within the Commission. A footnote following the sentence at the top of this article stated:

Commissioners Phillips and Wilson note that the claim suggested in this paragraph, i.e., that the burden of repair restrictions at issue in this Report will fall more heavily on minority communities, is not supported by the evidence cited. That may very well be the case, as the Report’s caveats with words like “may” and “can” denote. But the claim is a conclusion drawn by authors of the Report from citations to evidence of other things.

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1 Response to FTC Highlights Burdens Placed by Repair Restrictions

  1. Dave C says:

    While it is fair to say that tying restrictions to the impact on people of color and minority-owned businesses requires more data to support the claim, it’s economic common sense to draw the conclusion that restricting repair to a dealership-only marketplace reduces competition and allows dealers to demand top dollar. As such, it’s logical to state that the impact on low-income communities and smaller automotive repair businesses is substantial. A $2,000 invoice for replacement and recalibration is inconvenient for a person making a six-figure income. It’s “game over” for those among the “working poor” relying on that vehicle for basic transportation when other, more competitive service provider options are limited.

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