On January 15, 2025, the Federal Trade Commission (FTC), together with the State Attorneys General (AGs) for Illinois and Minnesota, filed a lawsuit against John Deere & Company (John Deere). The FTC’s complaint alleges monopoly maintenance through exclusionary conduct in violation of Section 2 of the Sherman Act and Section 5 of the FTC Act. The complaint alleges that John Deere restricted repair services for its large tractors by preventing equipment owners from repairing their own equipment and by foreclosing independent repair providers (IRPs) from competing with John Deere dealers. The FTC and State AGs seek a permanent injunction of John Deere’s alleged exclusionary conduct and a requirement that John Deere make all of its repair resources available to equipment owners and IRPs. The FTC voted 3-2 to sue John Deere, with both Republican Commissioners dissenting and Chair Lina Khan issuing a separate statement.
Key Takeaways
- Enhanced Scrutiny of Aftermarkets. Companies that provide durable goods should expect increased scrutiny of aftermarket practices. At both the federal and state level, antitrust authorities are scrutinizing and challenging exclusionary business practices.
- Evolving Regulatory Landscape. Approximately 30 states have introduced legislation protecting a consumers’ right to repair, and several states have passed these laws, including California, Colorado, Minnesota, and New York. These laws have focused on protecting the right to repair for agricultural equipment and digital electronics equipment. State AGs remain active in this space and, in some instances, may seek to enforce laws extending beyond the scope of federal antitrust law. With an incoming Republican administration, Democratic-leaning states may ramp up their enforcement activity if they perceive this issue is not sufficiently prioritized by the federal antitrust enforcers.
- Focus on Farming. Despite the Republican Commissioners’ dissent, bipartisan support for investigating conduct in the agricultural industry appears to exist. The incoming FTC Chair Andrew Ferguson expressed his support for both the FTC and Department of Justice Antitrust Division (DOJ) focusing on the agricultural sector, so we can expect this industry to remain at the forefront of the regulatory agenda.
Background on the Right to Repair
The FTC’s complaint against John Deere was not issued in a vacuum. Renewed interest in the right to repair dates back to the first Trump administration, with the FTC holding workshops, issuing reports, drafting policy statements, and bringing cases. The issue was also addressed in President Biden’s Executive Order and by Chair Khan in a congressional hearing. Further, John Deere is facing separate private litigation relating to its repair restrictions, in which DOJ issued a statement of interest supporting the claims against John Deere.
Allegations: Restricted Repair Services and Exclusivity of Software Repair Tools
The Complaint alleges that John Deere’s exclusive distribution of the fully functional repair tool, known as “Full-Function Service ADVISOR,” (hereafter Service Advisor), effectively forecloses John Deere equipment owners, who want to self-repair, and IRPs, who seek to compete with John Deere’s authorized dealers for repair services. This conduct allegedly allowed John Deere to sell more of its own branded replacement parts and to increase the prices for those parts.
John Deere manufactures agricultural equipment, including large tractors and combine harvesters, and distributes this equipment and replacement parts through its authorized dealers. John Deere’s authorized dealers primarily sell John Deere branded parts – rather than generic ones – and for some John Deere parts, the authorized dealers are the exclusive distributor. Therefore, the FTC alleges that John Deere benefits from increased parts sales when its authorized dealers service more customers.
Technological improvements to John Deere’s equipment allegedly necessitate the use of an electronic repair tool – Service Advisor. John Deere provided Service Advisor exclusively to its authorized dealers. The Service Advisor tool is required for certain electronic and mechanical repairs to John Deere’s equipment, which allegedly restricts the ability of owners to engage in self-repair or use IRPs. The complaint further claims that John Deere equipment owners are steered towards authorized dealers for repair services, and equipment owners will use the authorized dealer as a one-stop shop for any repair services and parts even if certain repairs could be completed without the Service Advisor tool. Thus, the complaint argues that the exclusivity of the repair tools amplifies both the volume of John Deere authorized repair services and the quantity of John Deere replacement parts sold at the expense of independent retailers and providers of generic parts.
In response, John Deere described the lawsuit as “baseless” and echoed Commissioner Ferguson’s belief that the complaint was issued on partisan grounds by an outgoing administration in the midst of active settlement negotiations. John Deere reiterated its long-standing commitment to ensuring customers can maintain and repair their own equipment and detailed recent initiatives and future plans to fulfill this promise.
The Future of the Right to Repair
The right to repair will remain a hot-button issue for the incoming administration with this lawsuit against John Deere and legislative interest in this area. State AGs will continue to play a crucial role and may ramp up enforcement if federal action wanes. Chair Khan’s statement called for the right to repair to be a continued area of focus in light of technological advancements, and incoming Chair Ferguson similarly applauded both antitrust agencies’ focus on agriculture. Incoming Chair Ferguson’s dissent stemmed from both procedural grounds – the complaint was issued in the last days of the Biden administration – and the recognition that an appropriate settlement could provide more expedient relief to farmers than a protracted litigation. Given incoming Chair Ferguson’s propensity towards settlement – broadly speaking and in this case in particular – the parties may reach a settlement once the Republicans have a majority at the FTC. It remains to be seen whether the incoming administration will take the same approach to the right to repair, but bipartisan support for investigating the agricultural sector appears likely to continue.
