Productivity Commission wants software updates included in Australian Consumer Law

In concluding that there are some significant barriers to repair in Australia, the Productivity Commission has put forward a range of recommendations from expanding the definition of the Australian Consumer Law through to seeing a product labelling scheme being developed.
Written by Aimee Chanthadavong, Contributor

Australia's Productivity Commission has concluded that there are some "significant and unnecessary barriers" to repair for some products, including mobile phones, tablets, and agricultural machinery, following the release of its final right to repair inquiry report to government.

The Productivity Commission acknowledged that while consumers currently have rights to have their products repaired, replaced, or refunded, as well as access to spare parts and repair facilities under the Australian Consumer Law (ACL), it said the current scope needed to be expanded to include software updates. It proposed the new guarantee, at a minimum, could cover software updates that correct operating problems and address security vulnerabilities.  

"The ACL was drafted over a decade ago -- since then, an increasing number of internet-connected products with embedded software have come to market … to provide clarity, the ACL should be amended to include a new consumer guarantee that manufacturers will provide reasonable software updates for a reasonable period of time, similar to the spare parts guarantee," the final report [PDF] said.

"The purpose of this amendment is to provide access to software updates that are critical to maintaining the quality (functionality, security and safety) of software-enabled products, for a reasonable time."

The Productivity Commission warned that the new provision, however, should not permit manufacturers to opt out of providing software updates.

"This is because, whereas the 'need' to access spare parts may only affect a small proportion of the consumer base (such as where a part has broken), the need for software updates is likely to be a systemic issue that affects the functionality or operation of an entire product line," it said.

The report also recommended that new text in warranties needed to be included to clearly state that consumer guarantees do not require consumers to have previously used an authorised repair service or spare parts.

It comes as the Productivity Commission said it identified during its inquiry there is poor consumer understanding of warranties and consumer guarantees, which it believes is limiting their capacity to exercise their right to repair when a product fails, particularly when it came to mobile phones, video game consoles, small electronic appliances, and watches.

Additionally, the commission noted given that harm caused by restrictions on repair supplies vary between product markets, it took the opportunity to examine several markets. One of them was agricultural machinery where the commission said harm from restrictions on repair supplies was "most evident and acute" and it believes there was "sufficient evidence of harm" for it to recommend that access to repair supplies for agricultural machinery be expanded.

"The market for machinery repairs is often dominated by the authorised dealer networks of leading machinery brands. Some farmers claim that these dealers and manufacturers limit access to repair supplies (including diagnostic software tools) for machinery owners and independent repairers," the commission said.

"This can lead to higher repair prices, additional effort and inconvenience (such as having to develop workarounds or undertake manual diagnosis due to lack of specialised diagnostic tools) and longer repair delays (creating avoidable financial losses from lost production). The high cost of switching between machinery brands (due to the high cost and durable nature of agricultural machinery) also means owners are often 'locked in' to their repair market."

Similarly, for the mobile phones and tablets market, the harm is equally concerning, the commission pointed out, particularly given that well-known brands restrict access to specialised tools and information required to repair their devices. Consequently, the commission believes there is an opportunity for the Australian Competition and Consumer Commission to carry out further investigation into the competition issues that arise as result.  

When it comes to the Copyright Act, the Productivity Commission also wants to see it amended to facilitate the access and sharing of repair information, such as repair manuals and data hidden behind digital locks.

"At present, copyright laws inhibit the reproduction of copyrighted materials -- including repair information such as manuals and schematics. In the Commission's view, this does not strike the right balance between the interest of rights holders and of others seeking to access and use those materials for the purpose of undertaking repairs -- and thus unnecessarily limits the ways in which repair information can be used," the report said.

"To address this, the Copyright Act 1968 should be amended to include a new 'use' exception that allows for the reproduction and sharing of repair information under certain circumstances."

The final report also delved into the improvements that could be made around product information and e-waste management. The commission recommended the Australian government make use of electronic tracking devices to determine the end-of-life outcomes of e-waste collected for recycling.

At the same time, the commission wants the government to develop a product labelling scheme for repairability and/or durability information for consumers, outlining the scheme should be developed in three stages.

The first is introducing a product labelling scheme within five years and establishing a working group to steer its development; followed by designing and implementing a pilot scheme for products where it is likely to have the most benefits, such as white goods and consumer electronics; and then reviewing the pilot within two years of commencement before assessing whether it should be modified or expanded. 


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