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FTC report identifies anti-competitive repair restrictions in aftermarket industry

May 17, 2021
The report notes that, “there is scant evidence to support [original equipment] manufacturers’ justifications for repair restrictions.”

The Federal Trade Commission (FTC) released a report to Congress identifying anti-competitive repair restrictions, parts limitations, and inaccessible software, including specifically in the vehicle aftermarket repair and maintenance industry. The report notes that, “there is scant evidence to support [original equipment] manufacturers’ justifications for repair restrictions.” The FTC findings are in lockstep with the position of the Motor and Equipment Manufacturers Association (“MEMA”), and its aftermarket-focused divisions, the Automotive Aftermarket Suppliers Association (“AASA”), and The Association for Sustainable Manufacturing (“MERA”).

Key takeaways from the report include:

  1. “The record contains no empirical evidence to suggest that independent repair shops are more or less likely than authorized repair shops to compromise or misuse customer data.”
  2. “To address unlawful repair restrictions, the FTC will pursue appropriate law enforcement and regulatory options, as well as consumer education, consistent with our statutory authority.”
  3. “The Commission also stands ready to work with legislators, either at the state or federal level, in order to ensure that consumers have choices when they need to repair products that they purchase and own.”
  4. “In some instances, a manufacturer’s use of a repair restriction could be challenged as an unfair practice under Section 5 of the FTC Magnuson Moss Warranty Act (MMWA)”
  5. “The Commission could revise its Interpretations of the MMWA to make clear that certain repair restrictions could violate MMWA’s anti-tying provisions.”

The report was approved unanimously by the 4 current FTC Commissioners.

“The FTC’s findings make clear what the aftermarket has long maintained – vehicle repairs often require specialized tools, difficult-to-obtain parts, and access to proprietary diagnostic software,” said Paul McCarthy, president, AASA. “This makes it needlessly onerous for many consumers to acquire necessary vehicle repairs. The aftermarket industry is committed to ensuring that consumers continue to have access to reliable, safe, affordable repair choices to maintain their vehicles. We thank the FTC for their work in completing this investigation and report, and we look forward to working with them and Congress to enact policies to protect consumers.”

“This report clearly shows that the work by MEMA and the aftermarket industry to fight for data access is truly in the best interest of consumers,” said John Chalifoux, president and COO, MERA. “It’s clear that federal legislation is warranted, and we look forward to continuing our efforts to protect consumer choice and block repair restrictions.”

MEMA, AASA, and MERA said in a joint statement: “[MEMA, AASA, and MERA] will continue to work with the automotive aftermarket industry to put in place the legislation and institutions necessary to ensure we can implement appropriate access to vehicle telematics repair data. We remain committed to securing our industry’s future and the safety of the nation's 282 million vehicles in operation. We will continue to focus on the needs of the industry as a whole and the safety and rights of consumers as we chart a path forward.”