IT Operations

What’s the impact of right-to-repair laws on enterprises?

Right to repair makes it easier to maintain rather than replace electronics, but the economic incentives aren’t always aligned.
article cover

Frank Scialabba

4 min read

Minnesota recently signed one of the most expansive right-to-repair bills yet, marking a major win for activists.

The new law, signed by Governor Tim Walsh in May, goes into effect July 2024, and covers most categories of electronics. It requires manufacturers to provide third-party repair shops the same parts, tools, and documentation—the last for free—that they use in-house or at official repair providers for all devices manufactured after July 2021. Unlike a law in New York passed earlier this year, it covers electronics sold via business-to-business and business-to-government contracts.

According to the Public Interest Research Group, a nonprofit that backs right-to-repair legislation across the country, Minnesota is the fourth state to do so. While proponents say the law will make it much easier for individual consumers to repair their devices at reasonable prices, the impact for enterprises and other organizations that tend to purchase equipment in bulk and under service contracts is less clear.

Making repairs cheaper. Nathan Proctor, who heads PIRG’s right-to-repair campaigns in the US, says the laws are primarily intended for two purposes: consumer protection and slashing the exorbitant amount of unnecessary e-waste generated when they replace rather than repair products. There is rarely any reason for manufacturers to restrict repairs other than profit from service contracts, Proctor told IT Brew.

Right to repair opponents are “concerned that they make a lot of money on their service contracts, and if there was a fair market, they would make less money on their service contracts,” Proctor said. He noted that while equipment sales take place on the open market, manufacturers can lock in revenue by restricting third-party repairs via contracts or DRM, or by maintaining a monopoly on parts or knowledge.

“Anytime you have really expensive capital equipment, the service contract market for those is extremely lucrative,” Proctor added. “And manufacturers have done a lot to try to capture that revenue.”

For example, the Software Freedom Conservancy recently demanded John Deere release source code for software tools that run on modern farm equipment, saying the company profits by installing software locks that make it difficult to fix machines like tractors without going to an official service provider.

It depends on the field. For many organizations, right to repair is likely to have a minimal impact on operations due to typical reliance on warranties to cover any issues, with equipment beyond warranty date often considered “end of life.” However, Proctor told IT Brew notable exceptions occur not just in agriculture, but HVAC systems, medical equipment, and enterprise IT equipment. Expanded access to independent repair options could extend the lifetime of those products.

Top insights for IT pros

From cybersecurity and big data to cloud computing, IT Brew covers the latest trends shaping business tech in our 4x weekly newsletter, virtual events with industry experts, and digital guides.

“Maybe it makes keeping equipment that you might be replacing in order to get back under warranty coverage less important, and maybe less necessary,” Proctor told IT Brew. “Because the lack of warranty does not mean the lack of options, right?”

David Chant, Autotrade senior desktop support analyst, told Enterprise.nxt, a Hewlett-Packard publication, that often the real reason enterprise IT teams don’t bother to fix malfunctioning major hardware is just that it’s simpler to get a warranty replacement.

“It’s not because they are unaffordable to fix but because enterprises can’t afford the downtime,” Chant said. “I call it [an] exchangeability replacement mentality…If a piece of equipment goes out of warranty there’s no financial incentive to have it repaired.”

Manufacturers are clearly concerned about the impact of right-to-repair laws on the enterprise market based on lobbying for carve-outs in legislation, Proctor told IT Brew. For example, the Minnesota law exempts some product segments like medical and cybersecurity tools, and while it covers enterprise computing devices, that doesn’t extend to any IT equipment “intended for use in critical infrastructure.” New York’s right-to-repair law contains extensive carve-outs that don’t extend repair rights to enterprise electronics.

More broadly, right to repair might help enterprises cut down on e-waste and replacement costs by limiting hardware upgrades made necessary solely by software updates. Proctor told IT Brew laws like Minnesota’s could also give enterprises cheaper alternatives when seeking post-warranty service.

“As soon as the warranty runs out, this service is either so inconvenient or expensive that the only logical choice when you hit an issue is to replace,” Proctor said. “And that’s not a natural consequence of how we use products. It’s a contrivance of these business practices, and it’s bad for the planet.”

Top insights for IT pros

From cybersecurity and big data to cloud computing, IT Brew covers the latest trends shaping business tech in our 4x weekly newsletter, virtual events with industry experts, and digital guides.