Assessing a Cross-Legislational Framework to Address Exploitative-Planned Obsolescence in India.
-Sebin Sebastian P M and Hanna Robin Vettoor
Introduction
Around the world, policymakers have been compelled to take a hard relook at the policy vacuums affecting sustainability, in their jurisdictions. Products seem to last for lesser amounts of time, and landfills simply get larger, with reduced scope for a resale market for an increasing number of products. Planned obsolescence practices, or the artificially induced unworkability of products where an environment exists for its continued usage by companies, for generating greater earnings, have greatly depreciated the power of the consumers in the local markets and hampered the flow of trade between Original Equipment Manufacturers (“OEM”s) and third-party buyers and sellers. These practices have the effect of accentuating unsustainable monopolistic power in the hands of OEMs creating a self-perpetuating cycle. Planned obsolescence has further added to the above-mentioned global increase in unmanageable waste. Many, however, argue that it is in fact, man’s greed for newer products that has taken an expensive toll on humanity. The primary character of consumerism having evolved, consumers nowadays have a ‘new and more is better’ mentality which has led to more wastage. However, it is also, if not more so true that consumers are often manipulated into looking for a better product; consumer psychology is often exploitatively mechanized by corporations who utilize strategies that involve, purposely designing items with a limited lifespan to encourage replacement and enhance earnings at the cost of the environment and long-term sustainability.
Keeping such exploitative practices in mind, in addition to an expanded call for the protection of the environment and consumer rights, given the increasingly complicated nature of products, legislators have begun seriously considering the right to repair (hereinafter referred to as RTR) legislation to tackle these issues. We as a community have indeed identified that a comprehensive and practical right-to-repair framework is necessary to address the unsustainably decreasing lifespan of products which is further augmented by exploitative planned obsolescence techniques used by manufacturers.
On 24th July 2022, pursuing the Lifestyle for the Environment Movement initiated by the Prime Minister, the Department of Consumer Affairs set up a committee chaired by Ms.Nidhi Kare (“Nidhi Kare Committee”) to develop a ‘framework’ for RTR in India. The committee’s tentative proposed framework enables consumers in identified sectors to better engage third-party repairers and ensure the sustainability of the products sold. Through a sustainability-driven perspective, the framework, conceptually, seeks to address the tendency of certain manufacturers to engage in planned obsolescence of their products, a method by which manufacturers reduce the operational lifespan of the product and attempt to compel consumers to purchase newer variations of the product developed by the manufacturer. However, there is no specific method through which planned obsolescence is carried out and not all methods are necessarily exploitative, as sometimes product durability is tailored as per customer expectation. Historically, the practice began with the car manufacturer General Motors creating yearly design remodels, which resulted in customers buying earlier replacements for their cars. This practice of introducing perennial design remodels to phase out older models then branched out into various practices involving, for example, the fashion industry creating a fashion cycle, printer manufacturers setting a time limit on the operation of printer cartridges and electronic gadget manufacturers disincentivising the affordable repair of a product with restrictions on tampering or repair of said gadgets in their entirety. RTR is thus, closely intertwined with addressing the practice of planned obsolescence by manufacturers but does not address the same in all scenarios. Furthermore, planned obsolescence as an effective business strategy requires a monopoly or, in the least, an oligopoly to function effectively.
Global Practices and the Nature of Responses to Planned Obsolescence so far
Of late, many countries worldwide, including the United States, the United Kingdom, and the European Union, have recognised RTR. In the United States, the Federal Trade Commission has directed manufacturers to correct unfair-anti-competitive practices and to ensure that consumers can make repairs, either themselves or through a third-party agency. The United Kingdom recently passed legislation requiring all electronic appliance manufacturers to provide consumers with spare parts for repair by themselves or local repair shops. Australia on the other hand has also resorted to repair cafes, which are free gathering places where volunteer maintenance specialists can share their skills. The European Union, has enacted legislation requiring manufacturers to supply product parts to professional maintenance specialists for a period of ten years.
Planned obsolescence significantly impacted the American I.T. industry of the 1980s and 1990s, as it was seen as a necessity to recover investments in software. However in 2011 the Motor Vehicle Owners Right to Repair Act was introduced in Congress to slow down the surging use of planned obsolescence as a business model. The legislation aimed to make available the production of spare parts as well as data pertinent to the repair process and allow customers to choose the repair outlets. In furtherance of the initiative begun by The Vehicle Owners’ Right to Repair Act of 2011, in 2021, 25 states in the United States passed or considered Right Repair legislation covering various appliances. Some aspects of the RTR legislation covers all electronics. On the other hand, certain aspects only cover vehicles. Additionally, other aspects include diagnostic data sharing, which is particularly critical as repair personnel require access to it to repair intelligent devices such as refrigerators and washing machines. Furthering similar objectives, President Joe Biden recently directed the Federal Trade Commission to develop national right-to-repair regulations. Some of the directives include enacting additional regulations that prohibit manufacturer policies barring the repair of equipment and devices by individuals and independent repair shops, and facilitating faster and cheaper repairs that will ultimately reduce e-waste.
Simultaneously, in the context of the pandemic, U.S. Senator Ron Wyden introduced the Critical Medical Infrastructure Right to Repair Bill in the United States Senate. The bill’s primary goal was to protect consumers from any copyright law infringement action while repairing critical medical equipment used in Covid-19 healthcare support. The Critical Medical Infrastructure Right-to-Repair Act of 2020 was designed to allow trained repair technicians to more easily access information and tools required to complete maintenance and repair of critical medical infrastructure in preparation for and as part of a response to the current COVID-19 crisis, with the aim to reduce stress on the already fragile healthcare system during the pandemic.
In the European Union, the European Commission provided RTR provisions to electronic device consumers in its Eco-Design Directive in 2021. The regulations of the Directive sought to ensure that electronic product manufacturers provide the necessary data and spare parts to extend their lifespan by at least ten years. The legislation is based on the EU’s Circular Economy Action Plan, created in 2020 to conserve the environment by eliminating electronic waste. This Action Plan provided a future-oriented agenda for achieving a cleaner and more competitive Europe. However, despite its lofty goals, the regulations excluded smartphones and laptop-computers from the Eco-Design Directive.
Governments, RTR crusaders, and environmental activists have pressured companies to reform by publishing do-it-yourself manuals and other similar steps. – In Re Apple Inc. Device Performance, a controversy arose in 2017 concerning Apple Inc. engaging in planned obsolescence by deliberately slowing down the performance of smartphone devices by Apple incorporation as a tactic to force its customers to upgrade to newer versions of their marketspace flagship device. Apple claimed that this scenario could be avoided by simply replacing batteries, which third-party repair shops were not permitted to do.
Since Apple had previously been at the forefront of pioneering anti-do-it-yourself monopolism through their repair service—the “Genius Bar”—the company, having been subjected to pressure from many lobbying groups, has decided to correct course and provide parts and tools to customers who wish to repair their products. This initiative remained a double-edged sword for consumers as performing a repair would not automatically void the warranty, however, an amateurish attempt would have resulted in additional damage.
RTR is beginning to be codified in law in multiple Countries. End users, consumers, and businesses with the RTR can now, in specified circumstances, repair their devices without legal or technical constraints. As discussed, a limited RTR exists in the United Kingdom, and a few states in the United States, and further expansion appears likely.
The Present Regulatory Landscape addressing Planned Obsolescence in India
Indian Law contains a mix of legislations that either address planned obsolescence or enable it. Thus, an analysis of Indian Law that may relevantly be associated with planned obsolescence may be divided into two categories. Laws that indirectly address Planned Obsolescence or its consequences in ways that benefit customers, and laws that facilitate planned obsolescence. Most consumer protection laws, which fall under the first category, do not, however, at present, explicitly protect against planned obsolescence.
Primarily addressing the Consumer Protection Act, 2019, under section 2(10), the Act identifies what constitutes a defective Good. It essentially addresses only quality and potency conditions and standards assured and agreed upon during the sale of the product itself. The Act does not, however, protect instances where the company as a matter of business strategy chooses to make the product obsolete through software updates or a lack thereof that prevent the working of the same. Nor does it address strategies which make it difficult to repair a product in terms of non-cost-effective post-sale services offered. Furthermore, the Consumer Protection Act does not characterise planned obsolescence as an unfair trade practice, resulting in the scope of remedies under the Act to be rather bleak except for instances where there has been an explicit lack in the quality or standard of the good.
Indian Intellectual Property law, on the other hand, has enabled restrictions on the RTR by consumers. The Copyright Act, 1957 prevents any tinkering with licensed software built into the electronic device. Attempts have been made, in the past, for instance, in the case of Telka Corporation v. Survo Gosh, to characterise the manufacturer’s practice of claiming infringement in case of unauthorised use of license software as a ‘misuse of copyright’. However, this remedy has been held in the case, to not exist in Indian Jurisprudence and is expressly inapplicable when the defendant raises this contention without clean hands. Further, the Trademark Act, 1999 enables manufacturer action against the unauthorised repair of products if the infringement of the trademark, either being a symbol or the shape of the part, fits into the scope of section 30(4) of the Trademark Act, which pertains to the right of the manufacturer to oppose further dealings. However, an action under Section 29 of the Trademark Act may be moot, given that it is used for personal and not commercial purposes.
Contrary to the aforementioned legislations, jurisprudence under the Competition Act, 2002 has made waves on the RTR front. In the case of Shamsher Kataria v. Honda Siel Cars, the CCI held the practice of OEM in restricting the sale of automobile spare parts to be an abuse of their dominant position and that entering into vertical agreements that to enabled authorised dealers to engage in the sale of the products at high price to be anti-competitive. Thus, opening the gates for permitting RTR in the automobile sector through open market access. It is nonetheless worth noting that while many have supported the conclusion of the CCI in the decision, its rationale for approaching this conclusion has been doubted. In this case, the CCI failed to consider conflicting evidence that Indian Consumers may conduct a whole-life cost analysis or that competitors might conduct such an analysis and compete accordingly. Significant criticism was also received for the CCIs approach to recommending the standardisation of certain car parts by the Ministry of Transport and Highways, which were likely to restrict the commercial freedom of car manufacturers.
Moving from a consumer-centric perspective to one of sustainability and disincentivising planned obsolescence from its genesis, the extended producer responsibility mechanism under the E-Waste Management Rules 2016 had previously, for instance, imposed a responsibility on manufacturers to collect back e-waste introduced into the market and set collection targets. While the same constitutes a step towards producer responsibility, critics of the Policy pointed out that collection targets were set without actively addressing the informal sector of waste management and recycling while also not taking consumer behaviour into account in setting realistic collection targets. Given a need for reform, the 2016 Rules were replaced by the E-Waste Management Rules 2022, which came into force in April 2023. These Rules introduced a more comprehensive ‘recycling-oriented target for the manufacturer through registered recyclers and enforced compensation and prosecution provisions in the event of non-compliance with the Rules.
How Indian Regulators should address planned obsolescence.
The 2022 E-Waste Management Rules discussed above create a framework ensuring effective compliance with the rules increases the cost of manufacturing products designed to have a shorter lifespan. This helps address one portion of the problem but does not serve as an elixir to consumer dissatisfaction while balancing legitimate business interests. A burdensome RTR framework can have the effect of disincentivising business and investment in sectors that are presently in dire need of growth, whereas a weak framework would only solidify the status quo.
In contrast, the Nidhi Kare Committee has identified farming equipment, mobile phones/tablets, consumer durables and automobile equipment as the sectors to address RTR concerns. A rationale for the selection of these sectors remains unclear; the choice of sectors must take into account actual statistics in relation to the durability of products in the sector and consumer behaviour in terms of how often these products are attempted to be repaired or replaced and whether alternatives to the products exist in the market. The committee must consider valid criticism of the decision of the CCI in Shamsher Singh Katria, in that planned obsolescence only works or RTR legislation is most effectively utilised in cases where there is a monopoly or an oligopoly in the said market. As previously highlighted, consumers are themselves less likely to stick to wasteful products when better alternatives exist in the market.
The Committee has so far proposed to require tech companies to provide access to “manuals, schematics and software updates to which the software license should not limit the transparency of the product in the sale”. Such a proposal, the authors believe, has the effect of bridging the existing information asymmetry as it exists between the buyer and the seller. Furthermore, the committee has preliminarily suggested that there must be the provision of parts and repair products to third parties to allow for the fixing of minor glitches with ease. Under this approach, contrary to the first instance relating to the printing of manuals, there may be in a few cases an onerous burden that is placed on manufacturers, especially if one is to consider what “to make available” entails. While it would be equitable to bar manufacturers from engaging in restrictive practices to require manufacturers to engage in the course of providing their possibly patented devices and processes to third parties, it would spell disaster for smaller companies and companies not classified correctly by giving weight to the nature of the market they are in(if the framework fails to make the distinction between small/large and companies in different economic systems).
The committee should acknowledge that suggesting a framework similar to the Bureau of Indian Standards proposing a standardisation of the Type C Charger, a move which received harsh criticism for its adoption in the EU, for having the effect of stifling innovation . However, in dealing with such tendencies, the committee must be mindful not to needlessly interfere in the business’s commercial creativity and property rights.
Further, amendments to the Copyright Act of 1957 and the Information Technology Act of 2000 could encourage free software, allowing users to extend the life of their electronic gadgets in specified scenarios. This would ensure that the goal of developing a framework for the right to repair in India is \ met by empowering local consumers and product buyers while enabling the faster resale of the product in the second-hand market along with simultaneously emphasising the development of sustainable product consumption and reducing e-waste. It is also essential to develop a strategy with recommendations for promoting public welfare and to put in place appropriate measures to prevent the misuse of DRM and Intellectual Property Rights in terms ofstifling innovation and competition. In the context of consumer rights and digital freedom, RTR will ensure that users have (low-cost) repair options.
Conclusion
The government must continue to take action to promote RTR and reduce the impact of planned obsolescence in India. This includes legislation to ensure that manufacturers follow government policies, expanding access to repair services, and providing incentives for consumers to repair their electronic devices by planning and designing hubs such as in Australia. Furthermore, the government should continue to invest in initiatives that train technicians and raise consumer awareness of the value of RTR. A product’s life can be extended in two ways: It can be returned to the manufacturer to be refurbished and resold or, it can be repaired for the customer who still owns the product. These are arguably the most effective methods of reducing the environmental impact of these goods as the carbon footprint of the logistics required to return products to recycling centres and along with their processing is reduced.
Due to the pandemic in India, millions of people have been pushed to adapt to an electronic device-based interface, resulting in a burgeoning potential consumer base. Given the market size in the world’s second most populous country, it is critical to advocate for effective and efficient RTR legislation while addressing issues arising from other legislations, however, the creation of such legislation must not unreasonably burden legitimate business interests.
Sebin Sebastian P M and Hanna Robin Vettoor are 4th Year students of law at School of Law, Christ University.