Right To Repair: Is There a Shift In The Wind?

INFORMATION ACCESSRight To Repair: Is There a Shift 
In The Wind? WASHINGTON (May 17, 2006) - The U.S. House of Representatives Energy and Commerce Committee's Commerce, Trade and Consumer Protection subcommittee held its third hearing on the Right to Repair issue, chaired by Representative Cliff Stearns (R-FL). Similar to the previous hearings, the subcommittee reviewed the progress made by the interested parties and received testimony from a number of groups on H.R. 2048, "The Motor Vehicle Owners' Right to Repair Act" (R2R).  Those testifying included:* Two parties in favor of legislation - Aaron Lowe, vice president of Government Affairs, Automotive Aftermarket Industry Association (AAIA) and Nancie G. Marzulla, a spokesperson testifying on behalf of the Coalition for Auto Repair Equality (CARE).* Two parties opposed to the legislation - Michael J. Stanton, vice president of Government and International Affairs, the Alliance of Automobile Manufacturers (Alliance) and Charles G. Gorman, chairman of the National Automotive Service Task Force (NASTF).* One neutral party - Deborah Platt Majoras, chairman of the Federal Trade Commission (FTC), whose organization has been selected by the subcommittee to oversee legislation if passed. No evidence to present Majoras acknowledged before the subcommittee that the FTC has little expertise or resources to effectively resolve issues within the automotive service industry. "We continue to believe that the best approach to resolve particular disputes between the parties, including the determination of the composition of any governing board, should be decided and implemented by industry participants rather than the government," she testified.  Majoras reported that of the 500 automotive complaints received by the FTC in 2006, not one was related in any way to issues in the proposed legislation. She also acknowledged the recent accomplishment of a formalized NATSF and stated that although a unilateral action, it was a first step toward a mutually acceptable agreement. She urged further discussion between all relevant parties to reach a satisfactory resolution that reflects consensus from all parties. She added that FTC staff would be willing to attend those discussions, if their presence would aid the groups in reaching agreement. Click here 
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Several subcommittee members - including Representatives Stearns, Jan Schakowsky (D-IL), Marsha Blackburn (R-TN), and Charles Gonzales (D-TX) - asked for quantified evidence supporting the anecdotal generalities of the testimony given to the subcommittee. Majoras confirmed that the FTC has not received any automotive complaints germane to the proposed R2R bill, and that the agency has no evidence that automakers have restricted access to service information. She added that she had no third-party research that assesses the validity of anecdotal claims. 

For example, Representative Gonzalez asked Majoras, "Is there a problem that would require federal legislation?" 

"I can't tell yet. What I have seen is anecdotal evidence," Majoras replied. "When we [the FTC] have asked to at least drill down on the anecdotes to get more information and try to figure it out, we have not received that information." Gonzales noted that it seemed reasonable, as in other industries' experience, that the FTC would be the natural focal point to receive information of these problems.

Continued support Both the AAIA and CARE spokespersons told the subcommittee that legislation was still very much needed. Marzulla told the subcommittee that a competitive choice for consumers was being manipulated by automakers towards dealerships. "This is because automobile manufacturers are increasingly using technology to successfully lock out automobile owners from maintaining and repairing their vehicles," she said. "Lacking the ability to talk to the vehicle's computers, the owners or their auto technicians cannot begin to diagnose, service or repair modern vehicles."  Marzulla estimated that independent repair technicians are turning away approximately 15 percent of all vehicles because manufactures have not released the service information that they provide to their dealerships. However, she prefaced that claim by saying it is impossible to know the exact extent of the current problem. She did not indicate how many automotive technicians she spoke on behalf of. The final portion of her testimony was a review of prior legislation regarding repairs, as well as protection of proprietary information. She urged the subcommittee to support R2R legislation and to use the FTC as the watchdog. She summarized her concerns by stating, "This legislation will halt the demise of the independent repair shop and preserve the vehicle owner's right to choose who will repair the vehicle." AAIA's Lowe pointed out that for the many car companies claiming that they are making everything available, passage of this legislation will impose no new requirements because they are already in compliance. For those that haven't, added Lowe, the legislation will require them to do what they should have been doing in the past.  While AAIA strongly supports passage of right to repair legislation, Lowe said, "I want to reiterate that AAIA feels strongly that a non-legislative agreement that has strong and comprehensive commitments from each manufacturer and that is enforceable by a third party is preferable over legislation." He added that to date, despite progress, the industry was not at that point. Lowe ended his testimony by urging the subcommittee to wait no longer and move as soon as possible to enact legislation. Working toward cooperation The Alliance's Stanton acknowledged that just as motor vehicles have become more complex, the servicing of them has also become a high-technology business requiring skilled, trained technicians and a sizeable investment in diagnostic and repair equipment. He told the subcommittee that, "Automakers provide independent repair technicians access to training information, specialized tools, and service and repair information necessary for servicing their customers' vehicles."  He said that automakers do attempt to ensure information is readily accessible for every aftermarket repair event and to fill in occasional gaps as fast as possible, as technology evolves and updates to OEM service information Web sites are made necessary. Stanton also said the good-faith efforts of NASTF and participating parties was self-evident and transparent, as published in both trade journals and on the industry's online forum, iATN. He ended his testimony by reminding the subcommittee that the automakers and the Automotive Service Association continue to believe that the industry has, with a formalized NASTF, a viable solution in place. Gorman told the subcommittee the purpose of his testimony was to inform its members about NASTF's current situation and its future. He stressed that tool and repair information was being provided and that the Vehicle Security Committee was close to resolving the issue of sharing of vehicle security information between OEMs and legitimate automotive locksmiths. Gorman also reviewed the steps that led to formalizing NASTF and moving towards incorporation as a C-6 not-for-profit corporation. The formalization and staffing would facilitate quicker responses to the occasional service information inquiries. The installment of a full-time manager and related support committees will enable the organization to respond quicker to occasional service information gap complaints, he added.  Gorman told the subcommittee that NASTF would continue to build on the progress made at meetings prior to formalizing, particularly the Third-Party Arbitration Process document, as well as reaching a consensus resolution of outstanding issues that had been "left for later." He pointed out that many of the problems relating to information availability stem from the automobile manufacturers' inability to predict the need for certain information. He explained to the subcommittee that automakers today are not vertically structured as they once were and they no longer own all the rights to some specific service information. Some of this information may be owned by a component or system supplier. NASTF's job, he stated, could be made a lot easier in the future if potential service information problems are solved before vehicles are designed and built.  "It is a difficult task to get all the different interests within this industry to agree on something as complex as the availability of automotive service information, but a good-faith effort is under way," concluded Gorman. "It is my belief that the work currently being done by NASTF needs to be done regardless of whether it is backed by legislation or not."The biggest surprise of all In the two previous hearings, the subcommittee members supporting the legislation have been vocal in their comments made before the testimony portion of the hearings began. In this hearing, however, the subcommittee members who questioned the need for the legislation were the more vocal members. Before testimony opened, Representative Fred Upton (R-MI) raised the fact that out of the 500 million repair events last year, there were only 57 requests for additional information. "If it ain't broke, don't fix it," he commented. Representative John Dingle (D-MI) told those present that, "This appears to be a magnificent cure for a problem that does not exist. All of the evidence which we have says that the industry has been working very hard to meet the needs of the independent repairman."  He acknowledged the efforts of NASTF since the last hearing and noted, "We should engage in suitable oversight, but there is no need for legislation, where none, in fact, is needed." Representative Mike Rogers (R-MI) said he considers R2R legislation to be merely a "solution in search of a problem." He noted that previous testimony contended that many consumer problems exist, but organizations such as the FTC do not have complaints, no lawsuits have been filed, nor have consumers with complaints made a presence at the hearings. Representative Gonzalez commented about his efforts in his own district to ascertain the need for legislation. He told the subcommittee that he has asked shops within his district to give him specific examples of their problems in accessing service information. To this day, Gonzalez noted, he hasn't received any. "Anticipatory legislation doesn't work well," he concluded. H.R. 2048 is scheduled for markup on May 25. We will continue to bring you updates on this legislation's progress.(Source: House of Representatives Energy and Commerce Committee's Subcommittee on Commerce, Trade and Consumer Protection)