FTC prepares lawsuit over Deere equipment repair practices
Federal Trade Commission has been investigating Deere's alleged violation of competition laws since 2021
The US Federal Trade Commission has prepared a lawsuit against tractor giant Deere & Co. alleging the company’s agricultural equipment repair practices violate competition laws, according to people familiar with the matter.
The agency is prepared to file the case as soon as this week over concerns the tractor maker has withheld key information and diagnostic tools from farmers and independent repair shops, said the people, who asked not to be named discussing a confidential matter.The FTC’s commissioners haven’t taken a final vote on whether to file a case, said the people.
A spokeswoman for Deere declined to comment on the FTC, but said the company has been taking steps to improve its self-repair program. The FTC declined to comment.
The company agreed in January 2023 that it would offer more tools to help customers repair their own equipment. Critics maintain that Deere manufactures its equipment in such a way that diagnosis and repairs frequently require its proprietary software, which can only be accessed at dealerships rather than independent repair shops.
The FTC has been investigating Deere since 2021 over its repair practices, Bloomberg previously reported.
Repair costs for commercial machinery, which includes agricultural equipment like tractors, has increased in recent years as a result of changes in technology and emission standards. The average cost for maintenance and repair jumped nearly 48% between January 2020 and December last year, according to the Bureau of Labor Statistics, which collects data on the industry.
A 2023 study by the US Public Interest Research Group found that US farmers could save as much as $1.2 billion a year by using independent mechanics, who often charge lower prices than dealerships for repairs. Deere is the biggest provider of large tractors in the US, according to PIRG.
Loosening manufacture-imposed repair restrictions has been a high-profile goal of consumer advocates for years. In 2021 the FTC released a report outlining an array of potential harms stemming from the conduct.
The FTC has previously targeted companies that adopt overly restrictive repair policies, reaching settlements with Harley-Davidson Inc., among others, over illegal terms in their warranty agreements related to repairs.
In July 2021, President Joe Biden signed an executive order on competition supporting the right to repair and efforts to make it easier and cheaper for people to repair their own items. In response, companies including Microsoft Corp. and Apple Inc. have loosened their repair policies.
In January 2023, Deere also entered into an agreement with the American Farm Bureau Federation and promised it would provide farmers and independent repair shops with the diagnostic tools and information to make their own repairs to equipment.
In July, FTC Chair Lina Khan said at a public appearance in Colorado the FTC was scrutinizing illegal repair restrictions after hearing complaints from farmers, without naming any companies.
Massachusetts Democratic Senator Elizabeth Warren wrote to Deere last year, saying the company was undermining its “right-to-repair” agreements.
