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FTC report finds scant evidence to support manufacturer justification for repair restrictions

May 12, 2021
Parts And Service

FTC found manufacturer explanations of restrictions wanting
Relying upon, among other things, IAMERS’ submission as to the medical equipment repair restrictions, the FTC noted that manufacturers did not provide adequate factual support for their position that "authorized repair persons" are more careful or that individuals or independent repair shops fail to take appropriate safety precautions. The FTC’s assessments of the current state of play in Section nine were revealing as the FTC’s assessments were not really qualified or conditioned.

The FTC pulled no punches when it said that the "advocates for change" have offered well-supported comments and the “majority [of the manufacturer’s explanations for the repair restrictions] are not supported by the record.” The FTC’s conclusion was less than a page and offered little explanation as to what may come next, saying only that it “will pursue appropriate law enforcement and regulatory options, as well as consumer education “consistent with statutory authority."

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Tying arrangements reaffirmed as illegal
The terseness of the FTC’s explanations leads one to speculate as to what it all means. One possible area of further FTC scrutiny seems to be "tying arrangements" in which "the sale of one product (the tying product) is conditioned on the purchase of a second product (the tied product) from the same firm.” One example perhaps could be: you can’t get parts for an MR scanner unless you can show that you bought the MR from the manufacturer. While not using this specific example, the FTC report did reaffirm that "tying" arrangements are not lawful.

Steering of work scrutinized
Steering of repair work to the manufacturer may be another area of possible FTC activity. Steering may occur in those cases where all of the repair restrictions pretty much amount to only the manufacturer being able to repair the equipment. In these types of cases a manufacturer could be found to have impaired competition and harmed consumers.

The FTC’s discussion of the "use of embedded software" also leads one to believe that these practices will be further scrutinized in the future. Embedded software “forces consumers to have the maintenance and repair of their products performed by the manufacturers’ authorized service networks”. Another topic that will be closely examined is “software locks” that disable a computerized device if it is repaired outside of the manufacturer’s authorized service networks. While intellectual property laws are designed to stimulate innovation, the FTC reminded us that antitrust laws are designed to enhance competition. The FTC noted that misuse of intellectual property rights may create barriers to repairs and competition.
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Don Bogutski

FTC Report

May 13, 2021 05:07

An important report on a significant subject of interest to all independent vendors and servicers of medical technology.

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Steve Arey

FTC Report "Nixing the Fix"

May 14, 2021 10:38

Having worked in the Medical Device repair industry for 35 years, 23 in the Federal Government, I believe "Best Practices" for consumer protection would be the FTC "require" manufacturers of all medical devices provide "proof" their devices are "safe" to use as least annually. Some devices, depending on use, may need to be more stringent.

Steven Arey
Certified Biomedical Equipment Technician -1986
Certified Radiological Equipment Specialist -1990

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Steven Ford

Link to the actual report

May 31, 2021 01:42

The report in full can be found here

https://www.ftc.gov/system/files/documents/reports/nixing-fix-ftc-report-congress-repair-restrictions/nixing_the_fix_report_final_5521_630pm-508_002.pdf

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