FTC, States Sue Deere on Repair Rights
LINCOLN, Neb. (DTN) -- John Deere's practices to restrict farmers from the ability to seek repairs for farm equipment including tractors have unfairly driven up equipment repair costs, the Federal Trade Commission and attorneys general in Minnesota and Illinois alleged in a new federal antitrust lawsuit filed Wednesday in Illinois.
The lawsuit filed in the U.S. District Court for the Northern District of Illinois, seeks to stop what the FTC said is "anticompetitive conduct" on the part of John Deere.
The lawsuit asks the court to order Deere to make available to owners of Deere large tractors and combines, as well as independent repair shops, access to its "fully functional Service ADVISOR repair tool and any other repair resources available to authorized dealers."
The FTC also asks the court for a permanent injunction against Deere.
The Biden administration has been investigating John Deere's practices, after agriculture groups in March 2022 filed a complaint with the FTC.
Those groups, including the National Farmers Union and state-level farmers unions along with the U.S. Public Interest Research Group (PRIG), alleged Deere's practice of withholding diagnostic software and other equipment from farmers violated the Sherman Act.
"The FTC's complaint alleges that, for decades, Deere's unlawful practices have limited the ability of farmers and independent repair providers to repair Deere equipment, forcing farmers to instead rely on Deere's network of authorized dealers for necessary repairs," the commission said in a news release.
"This unfair steering practice has boosted Deere's multi-billion-dollar profits on agricultural equipment and parts, growing its repair parts business while burdening farmers with higher repair costs."
Deere has defended its approach to not allowing anyone other than authorized dealers to do repair work on emissions for fear that repairs by farmers and independent shops could violate emissions laws.
In the lawsuit, however, the FTC and the two states said, "Like Deere does elsewhere in the world and like original equipment manufacturers do in the automobile and diesel truck industries in the United States, Deere could enable repair by equipment owners and IRPs (independent repair shops) without undue risk of violating environmental laws, risking operator safety, or compromising its intellectual property rights."
The FTC attempts to bring four counts against John Deere, including monopolization of the restricted repair services market, using an unfair method of competition in violation of the Federal Trade Commission Act, as well as violations of the Illinois Antitrust Act and the Minnesota Antitrust Law.
In addition to seeking a permanent injunction against Deere, the lawsuit also asks the court to order the company to make available to owners of "Deere large tractors and combines" the "Full-Function Service ADVISOR."
FTC Chairman Lina M. Khan said in a press statement that "illegal repair restrictions" can be "devastating for farmers" who rely on "affordable and timely" repairs.
"The FTC's action today seeks to ensure that farmers across America are free to repair their own equipment or use repair shops of their choice -- lowering costs, preventing ruinous delays and promoting fair competition for independent repair shops," Khan said.
The FTC's action comes in addition to several other antitrust lawsuits filed by farmers and consolidated in the same court, https://www.dtnpf.com/….
The new lawsuit alleges Deere has created a monopoly by restricting who can repair its equipment.
By creating these restrictions, Deere has "unlawfully acquired and maintained monopoly power" in the market for certain repair services for Deere agricultural equipment, according to the FTC complaint.
"Through its limited distribution of its repair tools, Deere has been able to control and limit who can repair its agricultural equipment, allowing Deere to maintain a 100% market share and charge higher prices, via its network of authorized dealers, for all repairs that require the fully functional tool," FTC said in a news release.
"Deere's repair restrictions allow it to reap additional profits through parts sales, as its authorized network of dealers almost always use expensive Deere-branded parts in their repairs in lieu of generic parts. Despite increasing public pressure to give farmers the right to repair their own equipment, including state legislative action, Deere continues to unlawfully withhold a fully functional repair tool from equipment owners."
A spokesperson for John Deere said the company declined comment on the lawsuit.
President-elect Donald Trump's nominee to chair the FTC and current commissioner Andrew N. Ferguson, however, offered a dissenting statement on Wednesday against the lawsuit along with commissioner Melissa Holyoak.
"First, given the timing of this filing, today's action appears to be one taken in haste to beat President Trump into office and lends to the suit the stench of partisan motivation," Ferguson and Holyoak said.
"I cannot support commission conduct that appears to be the result of brazen partisanship. The outgoing Democratic majority's decision to bring suit mere days before the presidential inauguration does the commission a disservice. Finally, filing the complaint now is deeply imprudent. The parties are in active negotiations over a fix that, if brought to fruition, could provide meaningful relief to America's farmers."
Joe Maxwell, chief strategy officer for Farm Action, said his group was pleased by the FTC's "bold action" to "bring justice to farmers who have been stripped of their right to repair their own equipment, robbing them of time and money as a result."
PIRG's Senior Right to Repair Campaign Director Nathan Proctor said action was needed for farmers because "the weather doesn't wait on a dealership's schedule -- a delay could mean the loss of a harvest. Not only might that bankrupt the farmer, it also raises food prices for everyone."
On Monday, John Deere announced the release of JDLink Boost, which is a satellite connectivity "solution" to allow farmers to continue operating Deere equipment in fields that have no cellular coverage, according to a news release from the company, https://www.deere.com/….
Read more on DTN:
"Deere Repair Investigation Confirmed," https://www.dtnpf.com/…
"Senator Questions Deere CEO on Repairs," https://www.dtnpf.com/…
Todd Neeley can be reached at todd.neeley@dtn.com
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