Today's Right To Repair report from the Productivity Commission states
• This report finds that there are significant and unnecessary barriers to repair for some products. It proposes a suite of measures that aim to enhance consumers’ right to repair while providing net benefits to the community.
• A ‘right to repair’ is the ability of consumers to have their products repaired at a competitive price using a repairer of their choice. Realising this aspiration in a practical way involves a range of policies, including consumer and competition law, intellectual property protections, product labelling, and environmental and resource management.
• Consumers already have rights to have their products repaired, replaced or refunded, and to access spare parts and repair facilities, under consumer guarantees in the Australian Consumer Law. These guarantees are reasonably comprehensive and generally work well, but they should be improved by: – introducing a new guarantee for manufacturers to provide software updates for a reasonable time period after the product has been purchased, to reflect the increasing dependence of consumer products on embedded software – expanding options for ensuring compliance with, and enforcement of, the guarantees to assist individual consumers to resolve their claims and for the Australian Competition and Consumer Commission to address systemic breaches of consumer guarantees – requiring manufacturer warranties to include text stating that entitlements to a remedy under the consumer guarantees do not require consumers to have previously used authorised repair services or spare parts, so that consumers are more aware of their rights.
• There are several opportunities to give independent repairers greater access to repair supplies, and increase competition for repair services, without compromising public safety or discouraging innovation. To this end, the Australian Government should: – require suppliers of agricultural machinery to provide access to certain repair supplies to reduce the harm of the pervasive barriers to accessing these inputs – undertake more detailed investigations into specific product markets (including mobile phones and tablets, and medical devices) to better understand the extent of harm and examine whether additional regulation would yield net benefits. – amend copyright laws to facilitate the accessing and sharing of repair information (such repair manuals, and repair data hidden behind digital locks).
• A lack of consumer information about a product’s repairability or durability is likely to make it difficult for some consumers to select more repairable and durable products based on their preferences, while reducing manufacturers’ incentives to develop such products. To address this issue: – the Australian Government (in consultation with consumer, environmental, and industry groups) should introduce a product labelling scheme that provides repairability and/or durability information for consumers. A pilot scheme should target a limited number of white goods and consumer electronics products.
• There is also scope to improve the way products are managed over their life, to reduce e waste ending up in landfill. In particular, the Government should amend product stewardship schemes to allow for reused e waste to be counted in scheme targets. Further, the use of electronic trackers within product stewardship schemes should increase, to improve awareness of the end of life location of e waste and ensure it is being sent to environmentally sound facilities.
The Commission's Findings and Recommendations are -
The Australian repair sector
F 2.1 THE AUSTRALIAN REPAIR SECTOR
A consumer’s decision to repair or replace a broken product is primarily driven by price. The inconvenience of repair and consumer preferences for up-to-date products are also likely to make repair less appealing. The repair sector accounts for about one per cent of all business revenue in Australia and has grown modestly over the past decade. • Most repair activity (revenue, number of businesses and workers) comes from industries with more expensive products, such as motor vehicles and machinery, that require regular maintenance and where repair is often more cost-effective than replacement. • There was less activity in repair industries for relatively less expensive products, such as electronics and appliances, where replacement tends to be more attractive. This is likely due to the relatively low and falling prices of these products over time, rapid technological development, and consumer preferences for new and up-to-date products.
Existing consumer rights under consumer law
F 3.1 CONSUMERS SOMETIMES LACK THE ABILITY TO EXERCISE EXISTING RIGHTS
The Australian Consumer Law provides consumers with rights to obtain a remedy (repair, replacement or refund) for defective products through consumer guarantees. These guarantees are reasonably comprehensive but consumers’ ability to access their rights could be enhanced by: • clarifying existing rights by explicitly requiring manufacturers to provide software updates for a reasonable period • enabling a super complaints process to complement the existing Australian Consumer and Competition Commission’s (ACCC) practices for identifying and dealing with potential systemic breaches of guarantees • enhancing relevant State and Territory regulators’ alternative dispute resolution options for individual cases, through options that can result in enforceable outcomes • empowering the ACCC to seek pecuniary penalties on suppliers and manufacturers that fail to provide a remedy when required to do so, in addition to obtaining redress for affected consumers.
R 3.1 REQUIRE SOFTWARE UPDATES FOR A REASONABLE PERIOD
The Australian Government should amend the Australian Consumer Law to include a new consumer guarantee for manufacturers to provide reasonable software updates for a reasonable time period after the product has been purchased, with no option to limit or exclude that guarantee.
R 3.2 ENABLE A SUPER COMPLAINTS PROCESS
The Australian Government should enable designated consumer groups to lodge ‘super complaints’ on systemic issues associated with access to consumer guarantees, with the complaints to be fast tracked and responded to by the Australian Competition and Consumer Commission (ACCC). The Australian Government should design the super complaints system in consultation with the ACCC, relevant State and Territory regulators, and consumer and industry groups. The system should be underpinned by operational principles — including criteria for the assignment (or removal) of designated consumer bodies, evidentiary requirements to support a complaint, and the process and time period by which the ACCC should respond.
R 3.3 ENHANCE ALTERNATIVE DISPUTE RESOLUTION POWERS
The State and Territory Governments should work together to identify opportunities to enhance alternative dispute resolution options in each jurisdiction to better resolve complaints about the consumer guarantees. In examining such opportunities, governments should consider: • the extent to which consumers in some jurisdictions face less comprehensive access to alternative dispute resolution and whether this is consistent with a national consumer framework • funding options to adequately resource enhanced alternative dispute resolutions • the net benefit of options that enable regulators to make enforceable decisions or facilitate enforceable outcomes • as an alternative, the net benefit of certain product markets (such as motor vehicles) having an ombudsman to make enforceable decisions or facilitate enforceable outcomes. The outcomes of this activity should be published.
R 3.4 ENHANCE REGULATOR POWERS TO ENFORCE GUARANTEES
The Australian Government should, in consultation with State and Territory Governments, amend the Australian Consumer Law to make it a contravention for suppliers and manufacturers to fail to provide a remedy to consumers when legally obliged to do so under the consumer guarantees. This would empower the Australian Consumer and Competition Commission to seek pecuniary penalties, in addition to redress for affected consumers.
Competition in repair markets
F 4.2 SOME LIMITS ON ACCESS TO REPAIR SUPPLIES LACK SOUND JUSTIFICATION
There is no evidence of a systemic competition problem across all repair markets. For some products, however, manufacturers are limiting third party access to repair supplies (such as information, tools and parts). While manufacturers often justify these limits as a way to safeguard against risks from poor quality repair (particularly for safety and security), these risks can be overstated for many products and types of repair. Where manufacturers have genuine reasons to restrict access to third-party repair, they should show clear and verifiable evidence of the associated risks.
F 4.3 LIMITS ON REPAIR SUPPLIES FOR AGRICULTURAL MACHINERY ARE CAUSING HARM
Manufacturer and dealer restrictions on repair supplies for agricultural machinery (including repair manuals, diagnostic software tools and spare parts) are causing material harm to farmers and other machinery owners through higher repair prices, reduced access and choice, and greater financial risks from repair delays. There is a strong case for additional measures to increase third party access to repair supplies (recommendation 8.2).
F 4.4 EXTENT OF HARM IN MOBILE PHONE AND TABLET REPAIR MARKETS IS UNCERTAIN
Manufacturer restrictions on repair supplies for mobile phones and tablets are likely to be resulting in some consumer harm (through higher repair prices and reduced choice of repairer), which could be material in aggregate, given the ubiquitous nature of such goods and the concentrated market for new devices. However, data limitations and some countervailing market characteristics (such as high product turnover) mean that the evidence base is insufficient to justify specific policy interventions at this time.
R 4.1 UNDERTAKE MOBILE PHONE AND TABLET MARKET STUDY
The Australian Competition and Consumer Commission should undertake a market study of the mobile phone and tablet market, to further examine the nature of the market, the magnitude of harm from repair barriers, and the merits of different policy responses (such as a repair supplies obligation on manufacturers).
F 4.5 MEDICAL DEVICE REGULATIONS DO NOT CONSIDER REPAIR ACCESS
Current regulations of medical devices — such as the ‘essential principles’ in the Therapeutic Goods (Medical Devices) Regulations 2002 —– aim to minimise safety risks to patients and device users, which has the effect of encouraging manufacturers to restrict access to repair. The regulations do not appear to account for the potential harm from reduced access to repair services (such as medical delays and additional costs), or that risks are likely to be low for some devices or for repairs completed by highly qualified independent repairers.
R 4.2 REVIEW THE MEDICAL DEVICE MARKET AND REGULATIONS
The Australian Government should conduct an independent public review of existing medical device regulations to assess whether they strike a balance between repair access and device safety that maximises community wellbeing. The review should consider whether current regulations create incentives for manufacturers to restrict repair, and examine potential ways to improve repair access for low-risk medical devices or for highly qualified independent repair technicians.
F 4.6 HARM FROM RESTRICTIONS ON WATCH REPAIR SUPPLIES IS SMALL
The high degree of market concentration and consumer lock-in in the prestige watch market in Australia suggests manufacturer restrictions on the supply of watch repair equipment and components to small independent repairers are resulting in consumer harm. In aggregate, this harm is likely to be limited due to the small size of the prestige watch repair market in Australia. Nonetheless, there are credible arguments that these restrictions may constitute a misuse of market power under Australian competition law (s. 46 of the Competition and Consumer Act 2010) that substantially lessens competition in the watch repair market by affecting the viability of local watch repairers. Such arguments have never been tested in an Australian court.
F 4.7 ACCC ACTION COULD ADDRESS CONCERNS ABOUT ENFORCEMENT
There are considerable costs and a high evidentiary threshold for bringing cases under the existing competition provisions in Part IV of the Competition and Consumer Act 2010 — such as the misuse of market power, exclusive dealing and anti-competitive agreement provisions. This is likely to discourage third-party repairers (particularly smaller businesses, such as watch repairers) from taking action against manufacturers and authorised dealers. However, the Australian Competition and Consumer Commission already has powers to investigate credible cases of anti competitive conduct in repair markets and, if warranted, institute court proceedings. New cases could test the impact of recent legislative changes and other global repair market developments, as well as provide an educative or deterrent effect for broader repair market conduct.
R 4.3 FURTHER INVESTIGATE CONDUCT IN WATCH REPAIR MARKETS
The Australian Competition and Consumer Commission (ACCC) should investigate whether manufacturer conduct in repair markets is contravening the restrictive trade practices provisions of the Competition and Consumer Act 2010, with a view to commencing proceedings. The ACCC’s investigation should initially focus on whether the alleged conduct of watch manufacturers is breaching the misuse of market power (s. 46) provisions.
F 4.1 MANUFACTURER WARRANTIES CAN DISCOURAGE INDEPENDENT REPAIR
Some manufacturer warranties include terms that automatically void the warranty if repairs are undertaken by a non-authorised repairer or use non authorised parts. Other warranties often contain dense and difficult to understand language, which can lead consumers to mistakenly believe that such terms exist. These voiding clauses can deter consumers from using third party repairs during the warranty period, limiting their choice of repairer and reducing competition in repair markets. Many consumers are also not aware that consumer guarantees under the Australian Consumer Law cannot be displaced by terms in warranties, and the guarantees are not extinguished if consumers have previously used non-authorised repair services or spare parts (as long as those services have not caused any damage to the product).
R 4.4 ADD NEW MANDATORY WARRANTY TEXT
The Australian Government should amend r. 90 of the Competition and Consumer Regulations 2010, to require manufacturer warranties (‘warranties against defect’) on goods to include text (located in a prominent position in the warranty) stating that entitlements to a remedy under the consumer guarantees do not require consumers to have previously used authorised repair services or spare parts. The final wording of the text should be subject to consultation with industry and consumer groups.
F 4.8 A PROHIBITION ON WARRANTY VOIDING CLAUSES IS NOT JUSTIFIED AT THIS TIME
Improvements to awareness of the consumer guarantees (through mandatory warranty text — recommendation 4.4) and the enforcement of those guarantees (through the introduction of pecuniary penalties — recommendation 3.4) will go some way towards reducing the deterrent effect of manufacturer warranty terms that void the warranty if any non-authorised repairs occur. Although a prohibition on such terms may have some additional benefits — through simplifying differences between warranties and the guarantees, clarifying ambiguous warranty language and covering non-consumer purchases — it may also increase costs for manufacturers and consumers, so is not justified at this time.
Intellectual property protections and repair
F 5.1 COPYRIGHT LAWS ARE AN IMPEDIMENT TO ACCESSING REPAIR INFORMATION
Copyright laws that prevent third-party repairers from accessing repair information (such as repair manuals and diagnostic data) are the most significant unnecessary intellectual property-related barrier to repair in Australia.
R 5.1 AMEND THE TECHNOLOGICAL PROTECTION MEASURES REGIME
The Australian Government should amend the technological protection measures (TPM) regime in the Copyright Act 1968 and Copyright Regulations 2017 to better facilitate repairers’ access to embedded information protected by TPMs necessary for issue diagnosis and repair. To do this, the Government should: • amend the existing TPM circumvention exception for repair in regulation 40(2)(d) of the Copyright Regulations 2017, to clarify its scope and application to permit circumvention in order to access information necessary to perform repairs to the product in which the TPM is installed • amend section 116AO of the Copyright Act 1968, to permit the distribution of TPM circumvention devices for the purpose of facilitating a permitted act of circumvention (such as circumvention for the purpose of repairing a product in regulation 40(2)(d) of the Copyright Regulations 2017).
R 5.2 INTRODUCE A NEW ‘USE’ EXCEPTION IN THE COPYRIGHT ACT
The Australian Government should amend the Copyright Act 1968 to include an exception that allows for the reproduction and sharing of repair information. In the immediate term, this exception should be included through the existing fair dealing framework in the Copyright Act. In the medium to long term, the Australian Government should pursue a more flexible copyright exception regime, including a principles-based ‘fair use’ exception.
R 5.3 PROHIBIT CONTRACTING OUT OF COPYRIGHT EXCEPTIONS
To give full effect to copyright exceptions, including those relating to repair, the Australian Government should amend the Copyright Act 1968 to make unenforceable any part of an agreement restricting or preventing a use of copyright material permitted by copyright exceptions.
Product obsolescence
F 6.1 EVIDENCE ON PREMATURE OBSOLESCENCE IS MIXED
There is growing community concern in Australia and overseas that product lifespans are becoming unnecessarily short (‘premature obsolescence’), with detrimental impacts on consumers and the environment. However, the evidence is mixed on whether premature obsolescence is a significant problem. • While it is not possible to exclude that some manufacturers engage in strategies to intentionally reduce product lifespans, such practices are unlikely to be widespread. • The lifespans of some products are becoming shorter, but this is often driven by consumers choosing to replace their products with newer ones rather than the products breaking; indeed, some products are becoming more durable. • For certain types of products (such as white goods and consumer electronics), some consumers find it difficult to access relevant information about product repairability and durability when making purchasing decisions. Such information gaps could contribute to premature obsolescence by preventing consumers from selecting more repairable and durable products based on their preferences, and reducing manufacturers’ incentives to develop these products.
F 6.2 INTERVENTIONIST RESPONSES TO PREMATURE OBSOLESCENCE ARE NOT NEEDED
Additional policies to prevent premature product obsolescence — in the form of mandatory product design standards, tax incentives and subsidies, or expanded consumer protection laws — are unlikely to have net benefits for the community. The Commission does not support such proposals. Mandatory product design standards, as well as tax incentives and subsidies for repair, are costly and unlikely to be an effective way of addressing concerns about the environmental costs associated with premature obsolescence. Existing consumer protection laws, combined with this inquiry’s recommendations — to increase the ability for consumers to access their rights and a new product labelling scheme (recommendation 6.1) — are likely to address some of the behaviours associated with premature obsolescence.
F 6.3 BETTER CONSUMER INFORMATION COULD LEAD TO LONGER-LIVED PRODUCTS
Product labelling is likely to help address information gaps in product repairability and durability for certain products, such as white goods and consumer electronics (finding 6.1). This can assist consumers to purchase more repairable and durable products that align with their preferences and encourage manufacturers to develop these types of products.
R 6.1 DEVELOP AND INTRODUCE A PRODUCT LABELLING SCHEME
The Australian Government should develop a product labelling scheme that provides consumer information about product repairability and/or durability. It should develop the scheme in three key stages. 1. Commit to introducing a product labelling scheme within five years and establish a working group (comprising relevant government agencies) to steer its development in consultation with consumer, industry and environmental groups. 2. Design and implement a pilot scheme for products where it is likely to have the most benefits (such as white goods and consumer electronics). 3. Review the pilot scheme within two years of commencement to assess its effectiveness and whether it should be modified or expanded to include additional products in the formal scheme.
Managing e-waste
F 7.1 E-WASTE IS A SMALL BUT GROWING WASTE STREAM
Annual e-waste generation is growing relatively quickly compared to other waste streams (more than doubling by weight between 2009-10 and 2018-19), but is a small share (less than one per cent by weight) of total waste generated in Australia. Information on e-waste is limited, but available data suggest that: • the main sources of e-waste (by weight) over the past decade were tools, washing machines, air conditioners, small domestic appliances (such as adapters, irons and clocks), cooking appliances (such as food processors and grills), and cathode ray tube televisions • solar panels and lithium-ion batteries are expected to generate growing quantities of e-waste over the coming decade.
F 7.2 RISKS FROM E-WASTE IN LANDFILL ARE RELATIVELY LOW
Australia’s landfills are generally well-regulated and well-managed, such that risks to the environment and human health from hazardous materials in e-waste are relatively low. That said, landfill quality varies, particularly among smaller and older landfill sites in regional and remote areas, generating increased risks from e-waste in some sites.
R 7.1 INCLUDE REUSE WITHIN NTCRS ANNUAL RECYCLING TARGETS
The Australian Government should amend the Recycling and Waste Reduction (Product Stewardship — Televisions and Computers) Rules 2021 to count e waste products that have been repaired and reused towards the annual targets of the National Television and Computer Recycling Scheme (NTCRS) co regulatory bodies. The exact design features that need to be incorporated into the NTCRS to enable reuse options should be determined in consultation with the scheme’s liable parties and co regulatory bodies. The changes should be designed in a way that minimise any adverse incentives, including risks from: • manipulating (or ‘gaming’ of) scheme targets, when the same products cycle through the scheme without legitimately being reused • unlawful exports for reuse that result in more products in the informal recycling sector, generating worse health and environmental outcomes • consumer concerns about data security for repaired and reused products. Any future product stewardship schemes should also include repair and reuse as options within their targets, where practical.
R 7.2 USE TRACKING DEVICES TO MONITOR E-WASTE EXPORTS
The Australian Government should make greater use of electronic tracking devices to determine the end-of-life outcomes of Australian e-waste collected for recycling. • At a minimum, the Government should increase the National Television and Computer Recycling Scheme’s use of tracking devices, to better monitor co regulatory bodies and their downstream recyclers and logistic providers. • The Department of Agriculture, Water and the Environment should also examine different ways to use tracking devices in e-waste products outside the scope of product stewardship schemes, taking into account constraints on the use of surveillance devices in some states and territories. Where possible, tracking should be conducted by independent third party auditors, using risk based sampling that focuses on the types of products and supply chains that present the highest risk of unlawful export or disposal of e waste.
Are broader right to repair laws needed?
R 8.1 EVALUATE THE MOTOR VEHICLE INFORMATION SHARING SCHEME
The Australian Government should establish an independent evaluation of the Motor Vehicle Service and Repair Information Sharing Scheme, once it has been in operation for three years. The report of the evaluation should be made public. The evaluation should assess whether the scheme is effectively meeting its objectives to improve competition and choice, whether the benefits outweigh the costs, and whether any changes are required.
R 8.2 INTRODUCE A REPAIR SUPPLIES OBLIGATION ON AGRICULTURAL MACHINERY
The Australian Government should introduce a repair supplies obligation on agricultural machinery that requires manufacturers to provide access to repair information and diagnostic software tools to machinery owners and independent repairers on fair and reasonable commercial terms. Design of the scheme should commence by the end of 2022. To inform scheme design and implementation, the Australian Government should: • monitor developments in the Motor Vehicle Service and Repair Information Sharing Scheme, as well as voluntary information sharing within the agricultural machinery industry, to determine the scope of the information to be included • consider whether this obligation should be implemented through an extension of the Motor Vehicle Scheme or through a separate scheme. The scheme should be evaluated after it has been in operation for three years, to assess its effectiveness and determine whether any changes are required, including extending the scheme to cover spare parts.
