In late 2022, New York Governor Kathy Hochul signed the “Digital Fair Repair Act” (S4101A/A7006-B) (to be codified in NY GBL §399-nn) (the “Law”). The law makes New York the first state in the country to pass a consumer electronics right to repair law.(1) Similar bills are pending in other states. The law is an abridged version of the bill first approved by the legislature last July.
In general, the law will require original equipment manufacturers (OEMs), or their authorized repair suppliers, to make parts and tools and diagnostic and repair information necessary to maintain and repair “digital electronic equipment” available to suppliers of independent repairers and consumers, on “fair and reasonable terms” (subject to certain exceptions). The law applies only to products manufactured for the first time and sold or used in the state for the first time on or after the law’s effective date of July 1, 2023 (thereby exempting electronic products currently owned by consumers).
The law defines “digital electronic equipment” as “any product with a value in excess of ten dollars (as adjusted by the consumer price index) that depends for its operation, in whole or in part, on incorporated or connected digital electronics to the product.” “Tool” means “any software program, hardware tool or other apparatus used for the diagnosis, maintenance or repair of digital electronic equipment, including software or other mechanisms … (and) any updates”.
The law also details what “fair and reasonable terms” means: to provide documentation to owners and independent repair providers free of charge, unless requested in physical paper form; make tools available at no additional cost or without impeding access to tools for diagnosis and repair (although OEM may charge for required tools in physical form); and make parts available at a cost equivalent to bids to an authorized repair provider and free from various “material obligations or restrictions,” among other things.
However, it should be noted that in Gov. Hochul’s signature notesaid it had reached agreement with the legislator on some technical amendments to the original bill related to the scope of the law, including allowing OEMs to supply “assemblies of parts rather than individual components when the risk of a Improper installation increases the risk of injury.”
It also noted, among other amendments, that an agreement had been reached to eliminate “the bill’s original requirement that required (OEMs) to provide the public with any passwords, security codes, or material for overriding security features.” ; the revised bill also includes changes to ensure that original equipment manufacturers will not be required to license any intellectual property.
The law contains a number of other limitations and exceptions. For example:
- No OEM will be liable for any damage or loss of data or functionality caused to digital electronic equipment by any independent repair vendor or owner arising in the course of a repair, including “any indirect, incidental, special, or consequential damages; any loss of data, privacy or profits; or any inability to use or reduced functionality of the digital electronic equipment”
- OEMs are not required to disclose trade secrets to an owner or independent service provider or supply parts to enable devices to be “modified”;
- The law does not affect some terms of contracts between OEMs and authorized repair shops (although the law does nullify contract terms that purport to waive or limit an OEM’s obligations under the law).
- OEMs and authorized repair providers are not required to make parts, tools, or documentation available for repair of digital electronic equipment “in a manner inconsistent with or in violation of any federal law, such as game and entertainment consoles, software, and related components.” The law also expressly excludes certain items or types of manufacturers or products from the law, including household appliances that have a “embedded digital electronic product” within them, medical devices, automotive manufacturers, agricultural and utility tractors, and off-road equipment.
It also said in Governor Hochul’s signing memorandum that an agreement had been reached to exempt digital products related to B2B and B2G sales “that would otherwise not be offered for sale by retailers.”
The law will be enforced by the Attorney General and, in most cases, gives vendors a brief five-day opportunity to remedy a legal violation after receiving written notice from the Attorney General. Violations of the law can be resolved/remedied with injunctive relief and civil penalties in an action brought by the Attorney General.
Ultimately, the law is generally hailed as an important and consumer-friendly measure, as repairing or restoring digital electronic equipment gives consumers more convenient and cost-effective options for maintaining electronic devices. The consumer advocates, do-it-yourselfers, and “manufacturer culture” fans who pushed for passage of this bill may have wanted a broader “right to redress” closer to the text of the bill original, but they continue to hope for a “ripple effect” of the law to repair laws spreading to other states and for manufacturers who are required to comply with New York to voluntarily offer similar rights nationwide. In anticipation of this law and similarly awaited legislation in other states, some OEMs have begun developing partnerships with repair suppliers or have begun preparations to launch their own advanced service programs (or have reached agreements with commercial organizations on the right to reparation).
The “right to reparation” in general
The general right to motion repair is growing for digital electronics and has only taken hold with the passage of New York law. Right to repair advocates for electronic devices say more repair and maintenance options can save consumers money and is needed to discourage “throwaway culture” and help climate change efforts by conserving energy and resources and reducing emissions due to the production of new devices. On the other hand, manufacturers claim that many electronic devices are already “e-cycled” or reused (for example, refurbished models for sale) without any legal obligation. Furthermore, they often state that repair restrictions or requirements that repairs be performed only by the manufacturer or authorized vendor are necessary for reasons of privacy, data security, efficient design, manufacturing, distribution, anti-piracy, and security. To this end, manufacturers of sophisticated electronics or machines are especially protective of the underlying proprietary firmware or computer code that runs the device, which generally remains the intellectual property of the manufacturer, not the consumer, and which can complicate repair options. independent.
The Administration has also dealt with this problem. President Biden’s Executive Order on Promoting Competition in the American Economy addressed the right to repair, specifically “unfair anti-competitive restrictions on third-party repair or self-repair of items,” as a practice that inhibits competition. The Librarian of Congress, in the latest three-year process in October 2021 to determine exemptions to the DMCA’s anti-avoidance provision, adopted a final rule that included exemptions to repair some legally acquired software-enabled devices designed primarily for consumers. Also, a FTC Report on Right to Repair restrictions published in May 2021 discussed the growing difficulty of repairing consumer products: “Repairs today often require specialized tools, hard-to-obtain parts and access to proprietary diagnostic software. Consumers whose products break therefore have limited choices. The report also discusses the potential antitrust issues that can arise with repair restrictions, particularly with regards to aftermarket restrictions – the markets for parts or services that are used after the initial purchase of a product. The agency has issued an accompaniment policy statement on manufacturer-imposed repair restrictions and pledged to investigate restrictions on illegal repairs. A year later, the agency showed its commitment by bringing several enforcement actions for the right to repair, including against the motorcycle manufacturer Harley-Davidson and Westinghouse outdoor electrical equipment manufacturer MWE Investments, LLC, for allegedly limiting a consumer’s right to repair by imposing warranties that contain terms stating that the warranty is void if customers use independent dealers for parts or repairs. Under the agreements, the companies agreed, among other things, to change the warranty terms to recognize the consumer’s right to repair.
Therefore, with the passage of the New York law and further scrutiny by regulators, device manufacturers, in addition to establishing consumer repair programs, should also review the terms and conditions of use of consumer electronic products to ensure that certain warranty provisions comply with New York or federal right to repair law.
(1) Note, in 2020, Massachusetts voters overwhelmingly approved a electoral measure on the right to repair of cars, which requires car manufacturers, inter alia, to make vehicle telematics data for model year 2022 and beyond available to third-party repairers; the law is currently under legal challenge.