Motorcycle manufacturer Harley-Davidson Motor Company Group, LLC and Westinghouse-brand outdoor generator maker MWE Investments, LLC are under fire for allegedly illegally restricting customers’ right to repair their purchased products. The FTC is ordering the companies to remove illegal terms from their warranties which voided the warranty if customers used independent dealers for parts or repairs, as well as urging them to recognize customers’ right to repair, come clean with customers, and alert dealers to compete fairly.
The FTC alleged that Harley-Davidson conditions its warranty coverage on the use of genuine Harley-Davidson parts and accessories. The motorcycle giant’s 2021 warranty states that the use of parts and service procedures other than those approved by Harley-Davidson may void the warranty. Further, the FTC alleged that Harley-Davidson failed to fully disclose all the terms of its warranty in a single document, as it required consumers to “see an authorized Harley-Davidson dealer for details.” The FTC alleged that MWE Investments’ warranty similarly conditions coverage on the use of genuine MWE Investments parts and accessories as well.
The FTC charged that Harley-Davidson’s and MWE Investments’ conduct is deceptive and in violation of the Magnuson Moss Warranty Act and the FTC Act. The FTC said that Harley-Davidson’s failure to fully disclose its warranty terms is also an alleged violation of the FTC's rule on the Disclosure of Written Consumer Product Warranty Terms and Conditions.
In its statement, FTC Chair Lina M. Khan (joined by Commissioner Rebecca Kelly Slaughter) explained that illegal repair restrictions can significantly raise costs for consumers, stifle innovation, close off business opportunity for independent repair shops, create unnecessary electronic waste, delay timely repairs, and undermine resiliency. They said that this type of harm can have a great impact, making it critical that the FTC continue to focus on combatting unlawful repair restrictions.
The FTC will publish its proposed consent agreements which bar the companies from tying their warranties to the use of authorized service or parts and prohibit them from misrepresenting any material facts about the warranty. The manufacturers are also required to clearly and conspicuously note in public statements that using third-party parts or repair services will not void the warranty, and must alert customers to the change.
The action comes just a few years after the FTC sent letters to six major companies warning them that their warranties may violate federal law. Now especially, companies should take notice and ensure they're in compliance.
"Other companies that squelch consumers’ right to repair should take notice”