How Companies Have Imposed the Death of Product Ownership

Consumers may think that because they bought something - from an iPhone to an automobile - they own it, but the growing dependence on software for operation and maintenance means that producers are retaining control for which they continue to charge the customer. 

Which means anyone refusing to pay up - in perpetuity - may lose the ability to use whatever it is they thought they owned. JL

Nathan Proctor reports in Business Insider:

Modern software allows manufacturers to tether product users to them, forever. Companies are beginning to monetize this control, with dystopian methods and the assistance of America's copyright laws. Apple isn't the only company to put restrictions on goods that people have already bought. As more devices run on software, manufacturers have started to exert more control over their products even after the customer has taken them home. In some cases, companies force customers to use their repair services, disabling the product if they try to fix it themselves. In other instances, corporations require people to pay for ongoing subscription to access basic features of the goods.

Andy Harding has been running his small electronics-repair shop, Salem Techsperts, in Salem, Massachusetts, for the past eight years. He does steady business fixing phones for college students and nurses from the nearby hospital. But soon after the release of the iPhone 13 in September 2021, Harding noticed a minor change to Apple's software that he thought might shut down his small shop for good.

One of the most frequent repairs Harding does — and one of his biggest revenue drivers — is fixing cracked iPhone screens. But Apple added a new feature to the latest model that would detect when the display was swapped, including screen repairs, and then disable the FaceID feature. The shift freaked out the owners of many repair shops, including Harding.

"People pay good money for a phone with FaceID, and they want it to work," Harding told me recently. "Broken iPhone screens are the number-one repair for shops like mine. I couldn't survive without that part of the business."

 

Eventually, Apple rolled out a software update that allowed FaceID to work after a screen repair. But the phone still warns users the screen is not genuine unless they use an "Apple-authorized" repair provider. But why does anyone need Apple's blessing to fix their phone? You already paid for it — you own the phone, you should be able to fix it on your terms.

Apple isn't the only company to put restrictions on goods that people have already bought. As more devices in our lives run on software, manufacturers have started to exert more control over their products even after the customer has taken them home. In some cases, companies force customers to use their repair services, disabling the product if they try to fix it themselves. In other instances, corporations require people to pay for ongoing subscription to access basic features of the goods. 

Modern software allows manufacturers to tether product users to them, forever. Companies are just beginning to monetize this control, with dystopian methods and the assistance of America's unbalanced copyright laws. But there are ways that consumers and policymakers can push back on this corporate attempt to redefine what it means to "own" a product. 

You bought it, but you don't really 'own' it

Imagine the start of a hypothetical summer Monday, some time in the future. You remotely start your coffee machine ($5 a month for the app to schedule brewing in advance and another $25 for recurring delivery of compatible pods) while you hit your stationary bike for a quick workout ($30 a month for access to classes). When you're ready to head into the office, the smart thermostat automatically turns down the air-conditioning (a $10-a-month feature) as you use an app on your phone to remotely start your car (which costs you $20 a month). And if you want to get any of that fixed? Put away your screwdriver, because you'll have to go to the manufacturer for even a minor tune-up.

While this may seem far-fetched, the explosion of subscription services for consumer products is pushing reality closer to this hypothetical. The global market for e-commerce subscriptions is expected to increase from around $73 billion in 2021 to some $904 billion in 2026. In addition to the proliferation of meal-delivery boxes and streaming services, companies are in many cases making access to the very thing you bought contingent on your payment: no subscription and you've got a brick taking up space. For companies, the appeal of subscriptions is pretty straightforward: a steady stream of revenue and a lot more money raised from their customers over time. While software development and maintenance comes with its own set of costs, the overhead is much lower than hardware manufacturing and gives companies more opportunities to make an additional sale — meaning that recurring revenue comes with huge profit margins.

Businesses use a slew of tactics to keep customers on the hook after they've purchased a product. One tactic is to use technical sensors to prevent unauthorized changes to the product. Take the experience of America's farmers: Newer equipment like tractors and combines often require special tools that manufacturers offer exclusively to authorized dealers. Along with highly technical computer systems, this makes it nearly impossible for farmers to fix their own vehicles. My organization, Public Interest Research Group or PIRG, calculated that repair restrictions cost farmers an additional $4.2 billion each year, with $1.2 billion going to the local authorized dealers and another $3 billion lost to equipment downtime. Similarly, Tesla's software can detect and restrict features from car owners that  equipment not from the company, such as after-market tow hitches (while Tesla's own hitches are out of stock).

In other cases, companies have tried to block consumers from accessing certain features at all unless they pay up first. Car companies have taken the lead on pushing this trend. Mercedes-Benz and BMW made headlines for charging users monthly fees for better acceleration and the use of heated seats, respectively. You already bought the seat heater (and the luxury car that contains it), but now you need to pay for the right to turn it on? Printer companies have used similar tactics to get people to sign up for subscriptions that remotely monitor ink levels but can also shut off your machine if you fail to pay. Imagine if you had to pay the contractor who built your house a monthly fee so the light switches would work!

Finally, manufacturers use internet connectivity to monitor and control what you do. If they detect you did something they don't like (maybe hot-wiring your heated seat), they can take away or disable other features. Tesla has been accused of revoking charge capacity, fast-charging compatibility, and other features remotely. Consumers are afraid to do anything that displeases manufacturers, knowing that they can be punished.

We need to end the continual monitoring of our behavior by some far-off manufacturer that can approve or reject the choices we make with products we bought.

You might think there ought to be a law against policies that make people simultaneously "buy" and "rent" things. But existing laws work against consumers, allowing manufacturers control what you can and cannot do. For example, overly broad copyright laws, in the hands of overzealous manufacturers, can make it a copyright crime to bypass technical systems to tinker with or repair your own device. The Digital Millennium Copyright Act was intended to prevent people from pirating music, games, or movies. But manufacturers have argued that the DMCA applies to software or firmware needed to fix or operate a piece of hardware. This overly broad definition of intellectual property has been leveraged to prevent independent repair and has redefined consumers' relationship with the goods they buy. By this interpretation, if the manufacturer installs a digital-protection measure around the heated seats, bypassing that could be seen as essentially piracy. If that's confusing, it's because it's silly.  

Manufacturers also author dense user agreements that contain language to prevent customers from tinkering with the product. Most people have run into long "Terms of Use" documents chocked full of legalese that stretch on for pages and pages. In most cases, consumers simply check "agree" with little to no knowledge about what they're signing. A 2017 Deloitte survey of 2,000 consumers found that 91% click to agree with terms and conditions without reading them.

But inside these dense documents are rules that prevent people from fixing their goods or let the company take back ownership if they don't approve of how customers use the product. Sneaking these terms and conditions past people undermines basic consumer rights. 

Tinker, tailor, service, mod

I believe in truth in advertising. If you're going to sell somebody something, sell it to them. If you are going to lease something to somebody, lease it to them. If you tether their future purchases to a secret "agreement" that you baked into the technology that they don't know about, that is deceptive. Not to mention, tinkering and fixing are American traditions. The ethos of "if it's broke, then fix it" has other benefits, too. Repair teaches critical skills, it saves consumers money, it helps cut waste and product obsolescence. Tinkering and fixing also leads to product innovations that can benefit everyone. 

There are solutions to protect ownership. The first is right-to-repair legislation, which I've worked to pass in various states over the past five-plus years. Right to repair requires manufacturers to make the parts, tools, and information needed to conduct repairs available to consumers, on fair terms. It also says that those parts and tools cannot require remote authentication to become operable, meaning no more having to ask for permission to conduct repairs. So far in 2023, 28 states have considered some form of right-to-repair legislation, and Congress has held multiple hearings on the topic. Legislatures have now passed laws in Massachusetts, Colorado, and New York — and we're just getting started. 

Another step is to clarify that repair isn't a copyright crime. The Freedom to Repair Act, introduced last year, would give a broad, permanent exemption to repair activities under copyright law. In addition to passing new laws, we need to enforce the laws we already have on the books. It's supposed to be a violation of antitrust laws to create a "tying" arrangement that forces someone who buys one product to buy other products or services. Anyone with a printer who has tried to find cheaper ink knows this isn't enforced effectively. 

The US Federal Trade Commission and the US Department of Justice need to crack down on embedded software that forces product owners to pay monthly fees to use hardware they own. Regulators should also crack down on toxic legal terms put into user license agreements, just as they banned certain anti-consumer terms from credit-card-use agreements. 

In the digital age, we need new consumer protections to reflect our agency as product-owning people. We need to be able to repair things without fear of reprisal. We shouldn't be forced to sign away our rights when we buy something. We need to end the continual monitoring of our behavior by some far-off manufacturer that can approve or reject the choices we make with products we bought.  Until then, we, like Andy Harding of Salem Techsperts, wait nervously to see what we will lose when the newest "innovation" hits the shelves.