Dive Brief:
- The Federal Trade Commission and two states have sued Deere & Co., alleging the tractor giant has a monopoly over its repair services, which raises costs and creates delays for farmers.
- According to a 37-page complaint filed Wednesday along with the states of Illinois and Michigan, the company made software to diagnose and repair equipment’s electronic functions that was, for decades, only available to authorized dealers and essentially handcuffed where farmers could go for critical repairs.
- The FTC said its lawsuit seeks to stop the tractor giant’s alleged anticompetitive practices and make the software tool more widely available. Deere bristled at the complaint and said it will vigorously defend itself from these “meritless” claims.
Dive Insight:
As tractors and combines become more technologically advanced, farmers have complained that manufacturers are limiting access to critical parts, tools or documents needed to fix the equipment themselves. Independent repair shops are also often shut out of accessing these tools, leaving farmers with fewer and often more expensive options.
In Deere’s case, the company’s interactive software tool, called Service Advisor, is only available to authorized dealers, according to the FTC’s complaint. That restricts farmers’ ability to quickly seek repairs necessary for planting and harvesting.
While another repair tool called Customer Service Advisor exists, it is incapable of doing all repairs on Deere agriculture equipment.
Because of these limitations, the FTC said Deere has “unlawfully acquired and maintained monopoly power in the market,” forcing farmers to spend more money on repairs that require the Service Advisor tool. The company’s restrictions also allow Deere to reap additional profits through parts sales because dealers “almost always” use expensive Deere-branded parts instead of generic parts.
“The FTC’s action today seeks to ensure that farmers across America are free to repair their own equipment or use repair shops of their choice — lowering costs, preventing ruinous delays, and promoting fair competition for independent repair shops,” FTC Chair Lina Khan said in a statement Wednesday.
In 2023, the American Farm Bureau Federation signed a voluntary memorandum of understanding with a number of agricultural equipment manufacturers, including Deere, to strengthen farmers’ rights to repair in exchange for dropping calls for tighter regulation. However, critics say the agreement fell short of real repair protections, and a group of farmers have moved forward with a lawsuit against the tractor giant.
“The complaint is based on flagrant misrepresentations of the facts and fatally flawed legal theories, and it punishes innovations and procompetitive product design,” Deere said in a statement.
The FTC voted 3-2 to file the lawsuit, with Commissioners Andrew Ferguson and Melissa Holyoak dissenting.
Ferguson argued that the decision by the outgoing Democratic majority requires more evidence and shortchanges an ongoing investigation. He also said the timing lends to the “stench of partisan motivation” in the days prior to President-elect Donald Trump taking office.
In recent years, the FTC has pursued similar right-to-repair cases against motorcycle giant Harley Davidson and grill maker Weber.
Earlier this week, Deere announced new capabilities allowing customers and independent repair technicians to reprogram company-manufactured electronic controllers.
“Deere remains fully committed to ensuring that customers have the highest quality equipment, reliable customer service and that they, along with independent repair technicians, have access to tools and resources that can help diagnose, maintain and repair our customers’ machines,” the company said in a statement.