Medical Device Manufacturers, Beware: FTC Ramps Up Enforcement Against Repair Restrictions
The Federal Trade Commission (“FTC”) recently released a policy statement addressing repair restrictions imposed by manufacturers and sellers (“Policy Statement”). The Policy Statement was the result of an FTC workshop entitled “Nixing the Fix,” and took a deep dive into how contractual restrictions on the right to choose repair services might “substantially increase the total cost of repairs, generate harmful electronic waste, and unnecessarily increase wait times for repairs.”
Monopolistic Repair Practices
The Policy Statement characterized certain of these restrictions as potential “tying arrangements or monopolistic practices—such as refusals to deal, exclusive dealing, or exclusionary design . . . .” It added that these practices could amount to violations of the Sherman Act and Section 5 of the FTC Act.
A Caveat to Medical Device Manufacturers
Although the focus of both this workshop and the resulting Policy Statement may have been the impact on smaller businesses when large businesses impose these restrictions upon consumers, the Policy Statement’s application could be much broader. As the health care industry continues to be a target, manufacturers and suppliers of expensive medical technology that impose contractual repair restrictions should take note.