Bill description: SB 1300 creates and imposes a host of new mandates and regulations on original equipment manufacturers.
Does it give government any new, additional, or expanded power to prohibit, restrict, or regulate activities in the free market? Conversely, does it eliminate or reduce government intervention in the market?
SB 1300 creates two new “unfair methods and practices,” it declares to be unlawful, as follows:
“Failing to make service literature, functional parts, and any necessary diagnostic equipment and proprietary tools available to independent repair facilities and consumers as required by 48-603G, Idaho Code.”
“Failing to make clear to a consumer any limitations on repair as required by 48-603G, Idaho Code.”
SB 1300 creates a new chapter of code known as Section 48-603G, Idaho Code, which defines and criminalizes numerous victimless behaviors involving manufacturers. At the same time, it conspicuously ignores that consumers already possess the ultimate veto over any practices they deem unfair: the right to not purchase an item or patronize a particular manufacturer.
SB 1300 mandates that “every original equipment manufacturer of electronic equipment sold in Idaho make available to independent repair facilities and consumers sufficient service literature, functional parts, diagnostic equipment, and proprietary tools to effect the repair of a product or device for the duration of its service life, regardless of whether such period exceeds the warranty period for the product or device.”
“Electronic equipment” is broadly defined and includes a host of items, many of which may be proprietary and specialized. This is a list of items that are subject to these onerous mandates. It is not exhaustive:
- Smartphones, electronic reading devices, tablets, and personal computers, including laptop computers.
- Home appliances, including ovens, stoves, microwave ovens, dishwashers, washing machines, clothes dryers, air conditioning units, furnaces, or other similar equipment.
- Electronic entertainment products, including televisions, video game consoles, and home audio equipment.
- Farm equipment, including combines, tractors, implements, self-propelled equipment, and related attachments and implements.
- Motorcycles and mopeds, as defined in section 49-114, Idaho Code.
- All-terrain vehicles, utility type vehicles, specialty off-highway vehicles, snowmobiles, and motorbikes, as defined in section 67-7101, Idaho Code.
- Recreational vehicles, including motor homes, travel trailers, and camping trailers, with or without their own source of power.
It should be noted that SB 1300 defines the “service life” of a product as being between 5 years and 20 years based solely on its price, regardless of what the product is. Combined with the mandate to make available “sufficient service literature, functional parts, diagnostic equipment, and proprietary tools,” SB 1300 goes beyond mere regulation. It effectively orders original equipment manufacturers to continue producing parts, equipment, and literature for decades, regardless of how many pieces of the original equipment they produce, or the intended lifespan of the equipment.
The problems here are abundant. A special edition smartphone, for example, which sold for a very high price due to its ornamentation, could be required to remain reparable for decades, long after it was unusable due to technological changes.
The concept of service life used in the bill also ignores the quantity of items produced. If an experimental product is created and sold in small quantities, (a historical example is Google Glass), it is still considered to have a service life of 10 years based on its price, (in this case, between $300 and $5,000). The manufacturer is then required to continue making service literature, functional parts, diagnostic equipment, and proprietary tools available for that time. This would hold true even for a single item made of specialty and exotic parts.
It is unclear how the mandates contained in SB 1300 would apply to a manufacturer that has gone out of business before the service life of all the products it sold has been reached.
Indeed, the demands of SB 1300 are understated. To require that a manufacturer “make available to independent repair facilities and consumers sufficient service literature, functional parts, diagnostic equipment, and proprietary tools to effect the repair of a product” is to require that it actually produce those items in the first place.
As an “original equipment manufacturer” includes “any person engaged in the business of making or assembling electronic equipment,” these mandates would also apply to those who build custom computers or other products that never had any service literature, functional parts, diagnostic equipment, or proprietary tools. Such products might not be readily reparable even by the original equipment manufacturer, yet the mandates would still apply.
The potential chilling effect on small and independent manufacturers who produce specialty, custom electronic equipment cannot be overstated.
SB 1300 mandates that “an original equipment manufacturer, retailer, or wholesaler, at the time of a sale of electronic equipment to a consumer, shall make clear to such consumer any post purchase limitations on equipment repair, including information regarding any necessary diagnostic equipment, proprietary tools, and any pertinent warranty restrictions. Such information shall be provided to consumers in plain language before the completion of a sale.”
This regulatory language also involves a constitutionally questionable element of compelled speech, which could require the manufacturer to reveal proprietary information and trade secrets.
Automobiles are conditionally excluded from these regulations, but only for so long as two memoranda of understanding remain in effect. Specifically, these memoranda are as follows:
- “The memorandum of understanding between the automotive aftermarket industry association, coalition for auto repair equality, alliance of automobile manufacturers, and association of global automakers dated January 15, 2014.”
- “The memorandum of understanding between the commercial vehicle solutions network, the truck and engine manufacturers association, the equipment and tool institute, the auto care association, and heavy duty aftermarket Canada, dated August 12, 2015.”
Requiring compliance with these regulatory frameworks is problematic both because it involves more regulation and because these frameworks were not created by and are not responsive to the Idaho Legislature.
Does it directly or indirectly create or increase penalties for victimless crimes or non-restorative penalties for nonviolent crimes? Conversely, does it eliminate or decrease penalties for victimless crimes or non-restorative penalties for non-violent crimes?
SB 1300 declares that a violation of these mandates is a violation of the Idaho consumer protection act, chapter 6, title 48, Idaho Code. The penalties under this chapter include civil penalties of up to $5,000 per violation and “dissolution or suspension or forfeiture of franchise” of a corporation.
SB 1300 also makes original equipment manufacturers, retailers and wholesalers subject to actual and punitive damages as provided in section 48-608, Idaho Code. Any of these businesses would be vulnerable if it failed to make available to an independent repair facility or a consumer sufficient the service literature and functional parts required to repair a product or device during its (legally defined) service life. Independent repair facilities and consumers would be entitled to recover damages under section 48-608(1), Idaho Code.
Does it violate the principle of equal protection under the law? Examples include laws which discriminate or differentiate based on age, gender, or religion or which apply laws, regulations, rules, or penalties differently based on such characteristics. Conversely, does it restore or protect the principle of equal protection under the law?
The penalties contained in section 48-608, Idaho Code, which would be newly applied to original equipment manufacturers, retailers, or wholesalers who fail to provide parts (which they may not even have) for up to two decades after an item is sold, contain a discriminatory provision. Specifically, the code states that “an elderly person or a disabled person” shall be able to “recover from the offending party an enhanced penalty of fifteen thousand dollars ($15,000) or treble [triple] the actual damages, whichever is greater.”
Does it violate the spirit or the letter of either the U.S. Constitution or the Does it violate the spirit or the letter of either the U.S. Constitution or the Idaho Constitution? Examples include restrictions on speech, public assembly, the press, privacy, private property, or firearms. Conversely, does it restore or uphold the protections guaranteed in the U.S. Constitution or the Idaho Constitution?
SB 1300 violates the freedom of contract and property rights in many ways. It puts an untenable burden on manufacturers and does not allow for contracts that stipulate that a product is not intended to be repaired or that it must be repaired only by its creator.
Analyst’s Note: Though SB 1300 makes only technical corrections to 48-103(1), Idaho Code, (which becomes 48-103(3) under the changes made), it should be noted that both the existing and revised language defines “Idaho commerce” in a manner that is unconstitutional. Specifically, it defines it as “any economic activity occurring wholly or partly within the state of Idaho or that affects economic activity within the state of Idaho.” The latter part of that definition encompasses economic activity that occurs outside the state of Idaho and thus falls under the jurisdiction of another state or, if it constitutes interstate commerce, federal jurisdiction.