Summary of the brief presented to the Office of Consumer Protection on the durability and reparability of goods
On this page:
- Comments on the guaranteed availability of repair parts and services
- Comments on the minimum functional length of life of a household appliance
The Competition Bureau (the Bureau), as an independent law enforcement agency, ensures that Canadian businesses and consumers prosper in a competitive and innovative marketplace.
Headed by the Commissioner of Competition (the Commissioner), the Bureau is responsible for administering and enforcing the Competition Act (the Act), the Consumer Packaging and Labelling Act (except as it relates to food), the Textile Labelling Act and the Precious Metals Marking Act.
In accordance with his mandate to submit observations to regulatory agencies, the Commissioner participated in the Government of Quebec's public consultation held by the Consumer Protection Office (the Office) on the sustainability, reparability and obsolescence of consumer goods (in French only).
Thanks to this consultation, which was intended to gather comments on the proposed amendments to the Consumer Protection Act (the CPA), the Commissioner was able to provide comments and recommendations to help the Office in making decisions that could impact competition in Canada.
Below is a summary of the Commissioner’s key comments and recommendationsFootnote 1 on certain proposed amendments to the CPA concerning
- reparability and
I. Comments on the guaranteed availability of repair parts and services
The Office’s proposal seems to fall under the debate raised by the “Right to Repair” campaigns conducted in various jurisdictions.Footnote 2
These “Right to Repair” campaigns are calling for legislative and regulatory amendments that would make it easier for repairers, other than those who belong the device manufacturer’s repair network, to repair devices, especially electronic devices.Footnote 3
The question of repairing consumer goods raises issues of competition that are at the heart of the debate at the national and international level.Footnote 4
This question puts into perspective the interests of different stakeholders, including consumers, repair industry players, manufacturers and merchants.
The Bureau is of the opinion that depending on the way this measure is worded, it could promote competition between repair industry players and be beneficial for the consumer.
The comments on the suggested measures involve the nature of the goods targeted by the suggested measure, the parts covered by the availability guarantee, and the beneficiaries of the guarantee.
1. Comments on the nature of the goods targeted by the measure
The Bureau encourages the Office’s proposal to expand the availability guarantee to include goods other than those covered by a contract under section 39 of the CPA.
In fact, repair services involve a wide variety of goods that are ubiquitous in consumers’ lives. In Quebec from 2014 to 2018, repair services saw consistent growth in revenue, totalling approximately $3 billion in 2018.Footnote 5
Across the country, in 2018 the repair industry generated revenue of almost CDN$14 billion.Footnote 6 Separately, the computer and electronic device repair industry generated more than CDN$2 billion; 14.2% of this revenue stemmed from services provided to individuals and households.Footnote 7
As for expanding the goods covered by this measure beyond those targeted by the type of contract in section 39 of the CPA, the Bureau recommended using a processFootnote 8 that would allow for the adoption of a flexible definition based on objective criteria established on the basis of the best available data.
Due to its flexibility, the definition of goods covered by the guarantee should take into account the increasing complexity of consumer goodsFootnote 9 and should be able to be adapted to future technological developments.Footnote 10
2. Comments on parts covered by the availability guarantee
The Bureau is of the opinion that the availability guarantee should cover those parts that allow for consumer goods to be repaired safety while respecting the rights of stakeholders, including intellectual property rights.Footnote 11
Right to repair campaigns are built around the realization that, because goods are becoming more and more technical and complex, repairing them requires access to tools and information that are often availably only to manufacturers and their repair networks.Footnote 12
In this context, the measure should define all the parts covered by the availability guarantee, so that it includes all of the diagnostic tools, manuals and replacement parts required to diagnose and repair goods (repair parts).
On this point, the case of the automobile repair industryFootnote 13 shows the importance of, on the one hand, providing access to repair parts and, on the other hand, paying close attention to the arguments raised to justify the industry’s refusal to share these parts.
In 2009, the National Automotive Trade Association (NATA)Footnote 14 established the Agreement Respecting the Canadian Automotive Service Information StandardFootnote 15 with the Association of International Automobile Manufacturers of Canada (AIAMC) and the Canadian Vehicle Manufacturers’ Association (CVMA). This agreement, which entered into force in Canada in 2010, is intended to ensure that independent repairers have access to the relevant information as well as the diagnostic tools and training information required to maintain and repair vehicles.
Similar agreements applicable to the automobile industry are in force in various jurisdictions.
In Australia, a study conducted by the Australian competition authority showed that the agreement currently in force is also intended to help independent repairers benefit from access to relevant information, including technical information and diagnostic tools.Footnote 16 In accordance with the voluntary commitments contained in the agreement, certain manufacturers are making it easier for independent repairers to access the relevant information. However, this access is often limited, especially when manufacturers refuse to grant access for security reasons.Footnote 17 Likewise, independent repairers’ access to replacement parts from the manufacturer is limited for security reasons and to protect intellectual property.Footnote 18
These observations should be read with caution.
A legislative or regulatory intervention to ensure that repair parts are shared could help remove obstacles for independent repairers. It could also help independent repairers create healthy competition for manufacturer-affiliated repairers.Footnote 19
This competition between providers could benefit the consumer thanks to greater choice in repair services and more competitive prices.
Without access to repair parts held by the manufacturer and made available to manufacturer-affiliated repairers, independent repairers are limited in the services that they can provide to consumers.Footnote 20
Furthermore, if exceptions could be made to sharing repair parts, it would be preferable to limit these exceptions, based on the best available data, to cases where the manufacturer can show proof that there is a real security risk or that it is protecting intellectual property.
Lastly, it would also be preferable for this access to be granted in a timely fashion. The Federal Trade Commission (FTC) workshop found that consumers benefit from independent repair services, among other things due to the proximity and speed of these services.Footnote 21
Therefore, it would be preferable for independent repairers to be able to maintain this advantage in the context of accessing repair parts.
3. Comments on beneficiaries of the availability guarantee
The aforementioned FTC workshop found that manufacturer opposition to the right to repair campaign is based mainly on the issue of identifying people who could have secure access to repair parts, i.e. professional repairers, manufacturer-affiliated repairers, the consumer or independent repairers.Footnote 22
The Bureau recommends that any person designated by the consumer, including independent repairers,Footnote 23 be granted this access as needed, when the consumer asks the manufacturer to do so.
As indicated above, granting this access to independent repairers could increase their chances of competing with manufacturer-affiliated repairers, and could be beneficial for the consumer.
In fact, the repair industry in Canada and Quebec consists mostly of micro- and small businesses. In 2016, the industry included 79,918 businesses across Canada, including 18,525 in the province of Quebec. Of these, 62.5 % were micro-businesses with fewer than five employees, 37.2% were small businesses, and 0.2% were medium-sized businesses.Footnote 24
Restricting access to repair parts to professional repairers or a certain category of repairers could also limit the consumer’s choice. Based on the requirements to qualify for access to repair parts, this could be an obstacle to the expansion of micro- and small businesses that are unable to qualify.
II. Comments on the minimum functional length of life of a household appliance
From a competition point of view, the more informed the consumer is, the more likely they are to make an informed decision when choosing one product over another. There is abundant literature highlighting the vendor’s privileged position in terms of access to relevant information about a good for sale. This literature can help better understand the consumer’s behaviour when this information is not disclosed in a timely fashion.Footnote 25
For this reason, the Bureau encourages measures that promote better access to information on certain relevant aspects of goods for which businesses could be competitive. The Bureau points to the relevance of when the information is disclosed, i.e. before the good is purchased and remains accessible to the consumer at all times.
Furthermore, the Bureau recommends implementing mechanisms to ensure that the relevant information given to the consumer is complete, correct and easy to understand.
Comments on the proposed measures concern how to determine the minimum functional length of life of a good and the choice of goods covered by the measure.
1. Comments on how to determine the minimum length of life
The Competition Act contains certain provisions prohibiting misrepresentations, including false or misleading statements about a good’s length of life.Footnote 26
Paragraph 74.01(1)(b) of the Act prohibits making representations to the public in any way whatsoever on the performance, effectiveness, or length of life of a product that are not based on an adequate and proper test thereof.Footnote 27
In light of the provisions of the Act, the Bureau recommends that the CPA specify that a determination of the minimum functional length of life of a product must be based on an adequate and proper test thereof.
Furthermore, the Bureau notes that the Act does not define the expression “adequate and proper test” in order to preserve a certain amount of flexibility in an increasingly complex and highly technical domain. However, it goes without saying that the test should be carried out before making any representation to the public.Footnote 28
These comments also apply to the definition of minimum functional length of life, which should take into consideration the requirements of the Act concerning adequate and proper testing.
2. Comments on goods targeted by the proposed measure
As for choosing which goods to target, the Bureau recommends that these goods are goods other than those covered under section 182 of the CPA in the definition of household appliance.Footnote 29
In its current version, the definition of household appliance in section 182 of the CPA is closely linked to the repair scheme in sections 183 to 187 of the CPA.Footnote 30 However, information about a good’s minimum length of life could be relevant for the consumer beyond the context of repairing these goods.
The Commissioner is of the opinion that the information should concern goods that are important for consumers, based on objective criteria according to the best available data, regardless of whether these goods are qualified as household appliances within the meaning of section 182.
Furthermore, the choice of goods should take into account the increasing importance of new information technology devices, including possible developments in smart device technology.
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