WASHINGTON, D.C. — Proposed Right to Repair legislation is ambiguous and opens the door for myriad controversies and litigation, according to the Federal Trade Commission, which foresees difficulties in enforcing the proposal.
A recent FTC letter, addressed to U.S. Rep. John Dingell (D-Mich.), a ranking member of the House Energy and Commerce Committee, states the bill would place the FTC in the role of reviewing vast amounts of documents beyond its expertise, and it would be difficult to determine which information would constitute trade secrets, considered exempt from the legislation. Also unclear is how provisions regarding the cost of this information would affect the consumer.
Introduced last year to the House of Representatives and as a companion Senate bill earlier this year, the bill seeks to prevent manufacturers from unfairly restricting access to the information and tools necessary to diagnose and repair vehicles.
Effects the letter will have on the pending legislation are unknown. Telephone calls to the bill’s sponsors, Edolphus Towns (D-N.Y.) and Joe Barton (R-Texas), were not returned by press time.
“With respect to the legislation itself, certain complexities and ambiguities in the language of (Right to Repair), and possible unintended consequences associated with it, could create major difficulties in implementation,” states the FTC letter, penned by Commission Secretary Donald S. Clark. “The bill would require the FTC to review potentially massive quantities of documents and software and attempt to resolve highly technical and complex disputes that are beyond the agency’s expertise.”
Further, the potential of the bill to provoke legal challenges could divert resources from “other consumer protection and competition priorities,” the letter asserts.
The Automotive Aftermarket Industry Association, which has pushed to get the legislation approved, counters many of the FTC’s criticisms.
“Apparently the FTC didn’t do a whole lot of research on this,” says Aaron Lowe, AAIA’s vice president of regulatory and government affairs.
Lowe, who said many of the FTC’s concerns have been addressed by the Environmental Protection Agency’s service information access mandate, says the letter has a lot of unanswered questions.
Lowe does admit that some parts of the bill may need to be reworked, but he adds the FTC has refused to meet about the issue. “How can you have a balanced view when you’ve never met the group?”
While the FTC agrees the legislation seeks a “laudable goal,” it feels the parties involved should first seek a voluntary mechanism for compliance. Acknowledging the inherent sluggishness of government channels, the letter states, “Self-regulatory programs, when successful, can address issues with greater speed and more flexibility than government regulation.”
The Automotive Service Association (ASA), which agrees with the FTC, brokered a deal last year with automakers to help guarantee access to OEM repair data and has lobbied against Right to Repair. Bob Redding, ASA’s Washington representative, declined to comment when asked about the letter.
Another potential snag in the bill, according to the FTC, is the issue of cost, or lack thereof.
The FTC states the bill is unclear regarding cost of repair and diagnostic information. If the bill were to require the disclosure of repair information at no cost, the letter posits how this would affect consumers. Manufacturers currently may recoup the costs of developing software and diagnostic tools by charging for this information, sometimes in the thousands of dollars, so a provision to provide the information for free could negatively impact the consumer.
“On the other hand,” the letter adds, “(If) manufacturers could continue to charge for the information, the (FTC) might well be faced with complaints that the charges were so high as effectively to preclude independent shops and car owners from obtaining the information.”
To mandate reasonable prices would require price regulation, another avenue with which the agency says it has no expertise, and something that would produce an “undesirable” result.
The EPA has already established regulations regarding reasonable cost, says Lowe. “We’ve worked for years with the EPA and have regulations in place regarding cost.”
The Right to Repair bill indicates protection for trade secrets, but a statutory mandate for disclosure in the bill does not provide exclusion for trade secrets, the letter adds.
Aside from that, the proposed legislation “would apparently put the FTC in the position of reviewing potentially massive amounts of highly technical information on an ongoing basis to determine whether particular information is entitled to trade secret protection. The FTC is not equipped to perform such a function.”
The FTC, the letter continues, “is a law enforcement agency, not a document screening agency and has no analogous ongoing document review responsibilities in other industries.”
The bill also does not address questions regarding copyright or patent protections, and “federal laws do not require companies to share proprietary information,” according to the FTC.
“That in itself is the main reason we need the bill…because we don’t want (manufacturers) keeping trade secrets from the independent aftermarket if they're providing the information to the new car dealer,” says Lowe. “It almost misses the point of the whole bill.”
The House Right to Repair bill has 115 co-sponsors and the Senate bill has 10 co-sponsors, according to the AAIA.
