The European Commission presented its legislative proposal for consumer product Right to Repair on Wednesday, 22 March. Whilst this is a step forward, it is hampered by not including the public and private sector (over 60% of the market) and a failure to curb the restrictive practices of some large manufacturers as well as the high price of repair. Addressing these issues would make it a powerful force for change in increasing repairs across the board, achieve better outcomes for the environment, job creation and making best use of resources.
The rationale on extending product life is clear. The manufacture of electronic products generates a large amount of greenhouse gas emissions (an average of one tonne per server, for example) and the other biproducts of the production process can cause soil and water pollution. Electronics also contain a significant amount of critical raw materials that are in rare or politically unstable supply. Finally, the rate of change on electronic goods is so high that electronic waste is the fastest waste stream on the planet, predicted to reach 74 million tonnes per year by 2030 according to the latest UN report.
This proposal is part of the EU Green Deal package of initiatives that also includes the Ecodesign Directive and Circular Economy legislation. It aims to encourage society to prolong product life, reduce strain on natural resources and decouple economic growth from environmental harm. The legislation on the right to repair involves amendments to the Sale of Goods Directive. The objectives are to make repair easier for consumers through reducing unsustainable consumption, to encourage producers to design goods that last longer and are easily reparable, and help build a circular economy.
It is worth recalling that in its resolution of February 2021 on the New Circular Economy Action Plan, the European Parliament supported the Circular Electronics Initiative and the right to repair, stating that it should address the shortcomings in durability, circular design, presence of hazardous and harmful substances, recycled content, reparability, access to spare parts, upgradability, e-waste prevention, collection, reuse and recycling (both for consumers and B2B). It also called for the integration of issues linked to early obsolescence including product obsolescence caused by software changes.
So, how much does the latest proposal fulfil these aims?
At the moment, the Right to Repair legislative proposal focuses on consumer goods. Some of these products like smartphones and tablets are arguably crossovers into enterprise electronic goods. However, with 63% of the total ICT market being business to business, there is still a large proportion of electronic goods that is not covered. Although, there is a review scheduled, this is for five years’ time. In our opinion, this is not soon enough to deal with the fact that almost two thirds of the problem has not been addressed. Work should begin now on extending this to business and public sector.
Even in the initial stages, the proposal has a large and obvious loophole on repair. Although, it says that repair must be prioritised over replacement in the initial two-year warranty period, this does not apply if the repair is more expensive. The Commissioner stated there would be oblique benefits from circular design coming through, which would make repairs cheaper, and the transparency issue, making repairability a competitive advantage. However, these are not sure things and do nothing to address manufacturer behaviour now and in the immediate term. If the legislation went further, and forced manufacturers to report actual figures on repair over replacement then there would be better oversight on how committed they are to supporting repair.
Refusal to repair is to be declared illegal. This will hopefully raise the proportion of products that are repaired above 20%, which is the current figure. However, the wording says “freely available”, not “free of charge”, which raises the issue of cost and pricing repair out of the market through exorbitant spare part and service fees. However, there was no mention of price in this discussion and keeping repair at an affordable level.
Possible implications for the enterprise IT market
Online repairs platforms are planned at national level, which match customers with businesses offering repair and refurbishment services. This supports the B2B market as well as the consumer market and would offer organisations a resource to extend the product life on their ICT estates. There will be a standardised EU repair information form to include price, conditions of service, timeframe and use of another product whilst the repair is being carried out. This is good news for the secondary market and ultimately job creation in the sector because it provides an established, standardised marketplace for providers. It also stimulates trade between member states because each market place is open to all companies within the European Union.
Member states will also have the option to incentivise the use of repaired products with sales tax reductions. This would help make repair, refurbishment and product life extension more attractive to organisations as well as individuals.
Collective redress against refusal to repair is mentioned as part of the Environmental Green Claims mentioned it the Right to Repair legislative proposal. If utilised, it could create a useful precedent for businesses focused on repair. In our view, the Commission should be intervening in a more decisive way on the restrictive practices of certain large companies which inhibit repair and reuse as well as the economic benefits of stimulating the after-market.
Spare parts and firmware issues, both key to the enterprise (B2B) ICT market, have been blockers to product life extension in the past. These are covered in the legislative proposal by the phrase “access to appropriate spare parts and repair related information and tools”. Again, these must be made freely available although not free of charge. This again raises the economic blocker to repair mentioned earlier. There is also no stipulation on how long these will be available for.
The legislative proposal handles the long-term view by making companies provide information on the long-term availability of supporting software at point of sale. The idea is that products with longer lasting software will be more attractive to customers and therefore create a competitive advantage. This is potentially good news for the secondary software market since it could create more opportunities for third party software maintenance and support.
The road ahead
This initiative is a step in the right direction for large scale repair and product life extension but needs to be extended to realise its full potential. It establishes knowledge, capacity and expectation in the market for repair, maintenance and making best use of resources. This elevates the role of the secondary market to a key player in the circular economy.
This proposal will now be discussed before adoption within the European Parliament and the Council of the European Union. Free ICT Europe will look to participate actively in the upcoming legislative debates, meeting with key decision-makers in order to present the ICT aftermarket views on the current state of the proposal and potential improvements to the text.
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