On 19 June 2016, the Google subsidiary Nest will permanently shut down the Revolv smart home hub, following its acquisition of the device's maker in 2014. From that date, the Revolv app will not open, the hub will not work, and the service will cease functioning altogether.
As Revolv owner Arlo Gilbert eloquently penned, from 19 June, 'a container of hummus will actually be infinitely more useful than the Revolv hub'.
A decision by a manufacturer to intentionally 'brick' a product in this way potentially raises questions under the Australian Consumer Law (ACL).
The bricking of Revolv
Revolv is (or was) a small home automation hub which allowed users to unify smart devices. The core functionality was enabled by internet-enabled software embedded in the hardware, a 'Lifetime Subscription' to which was included in the purchase price of US$299.
Shortly after Nest's acquisition of Revolv, the sale of the hub was halted and Google/Nest announced the development of its new Nest home automation product, 'Works with Nest', which would supersede Revolv, leading to the service's 19 June shutdown.
The explanation shutdown provided to Revolv customers on the Revolv website is that the 'one-year warranty against all defects in materials or workmanship has expired for all Revolv products'. Revolv has, however, decided to offer consumers a refund for the purchase price of the now useless device.
Prior to the acquisition, the Revolv website's FAQ also reportedly stated that Revolv would not provide warranty coverage for products shipped and/or used outside the United States and its territories.
How might this play out in Australia?
Consumers are familiar with the practice of discontinuing updates to, or the production of older models of, products. That being said, this type of conduct raises new concerns over protecting consumers from the discontinuation of devices, particularly in circumstances where the core functionality of a device is provided by virtue of a internet-based software platform controlled by the device's maker.
The recent decision in ACCC v Valve Corporation is significant in this context, as it highlights the broad coverage of the ACL. The Australian Federal Court held that Valve, a US company, had engaged in misleading and deceptive conduct in Australia on its website, through which consumers around the world (including in Australia) could download games.
However, in the present context, given that Revolv did not ship to or engage distributors outside of the United States, the likelihood of Australian consumers being adversely affected (and if they were, Revolv being found to have engaged in conduct that contravened the ACL in Australia) is relatively minimal.
However, if a product like Revolv had been sold in Australia (and thus the conduct of Revolv and/or its suppliers fell within the purview of the ACL), there would be several potential rights available to consumers and, as a corollary, avenues of potential liability for suppliers or manufacturers of the device under the ACL.
First, the supplier or manufacturer could be liable for misleading or deceptive conduct. Revolv consumers signed up for a 'Revolv Lifetime Subscription' which was expressed to last for the 'lifetime of the product'. The use of the term 'lifetime' could be seen as misleading or deceptive if Revolv did not make sufficient efforts to inform consumers of any right it had to unilaterally change or terminate the service. It also raises questions over the meaning of the 'lifetime' of the product – in particular, whether it would be understood to refer to the lifetime of the hardware or the software.
In this case, Revolv's warranty and return policy stated that Revolv 'does not warrant that its products will operate without interruption or will be error-free, or that all errors will be corrected'. However it seems unlikely that such a statement would generally be sufficient to counter any claim for misleading or deceptive conduct. This type of wording would be understood as disclaiming liability for temporary interruptions, but not as permitting Revolv not to take steps to correct fundamental errors preventing the use of the product, let alone unilaterally and deliberately ceasing to make its service available.
Second, it is important to remember that the ACL provides consumers with certain guarantees and that a supplier or manufacturer cannot avoid the effect of these consumer guarantees through disclaimers, limitations or the use of its own express warranty. These guarantees include a guarantee that goods are of 'acceptable quality'. This guarantee requires the goods be fit for all purposes for which goods of that kind are commonly supplied and be durable, having regard to the nature of the goods, representations made by the supplier or manufacturer, and other relevant matters. In addition, there is a guarantee that goods will correspond with any description by which they were supplied.
In this case it is difficult to say definitively that any of the consumer guarantees would apply to provide consumers with a remedy in relation to the shutting down of the underlying software platform. However the fact that the Revolv hubs were sold on the basis of a 'lifetime subscription' would be more likely to lead a court to conclude that the disabling of the products amounted to a breach of one or more of the guarantees, if it were found that consumers would reasonably expect the hardware to continue to have functioning software for the 'lifetime' of the hardware, in order to be of acceptable quality and justify the US$299 price tag.
More guidance on these issues may be forthcoming, as the ACCC is currently examining Apple's conduct in relation to its 'bricking' of iPhones. As you may recall, this involved a software update rendering iPhones unusable where consumers had engaged a non-Apple service provider to carry out repairs on their mobile. We will keep you posted on any enforcement action taken by the ACCC.