FTC sues John Deere over 'monopolistic' repair practices
The Federal Trade Commission (FTC), along with the Illinois and Minnesota Attorneys General, are suing agricultural equipment manufacturer Deere & Company. The suit, according to FTC, is a result of the company's "unfair practices that have driven up equipment repair costs for farmers while also depriving farmers of the ability to make timely repairs on critical farming equipment, including tractors."
The FTC’s complaint alleges that, for decades, Deere’s practices have limited the ability of farmers and independent repair providers to repair Deere equipment, forcing equipment owners to instead rely on Deere’s network of authorized dealers for repairs. This unfair steering practice, per FTC, has "boosted Deere’s multi-billion-dollar profits on agricultural equipment and parts, growing its repair parts business while burdening farmers with higher repair costs."
“Illegal repair restrictions can be devastating for farmers, who rely on affordable and timely repairs to harvest their crops and earn their income,” said FTC Chair Lina M. Khan. “The FTC’s action today seeks to ensure that farmers across America are free to repair their own equipment or use repair shops of their choice—lowering costs, preventing ruinous delays and promoting fair competition for independent repair shops.”
The FTC provides more context for its suit, explaining:
"The only fully functional software repair tool capable of performing all repairs on Deere equipment is produced by Deere. Deere makes this tool available only to Deere’s authorized dealers, forcing farmers to solely rely on more expensive authorized dealers for critical repairs. By creating these restrictions, Deere has unlawfully acquired and maintained monopoly power in the market for certain repair services for Deere agricultural equipment, according to the FTC’s complaint."
With the increasing "computerization" of Deere’s equipment, owners must now rely on a software tool called Service ADVISOR, which the FTC says Deere makes available only to its authorized dealers.
The FTC reports that an "inferior" repair tool exists, called Customer Service ADVISOR, but it does not work for all repairs on Deere agriculture equipment. The complaint says Deere also fails to make available to generic repair tool developers the information needed to develop a fully functional repair tool, as equipment manufacturers in the automotive and trucking industries do.
John Deere's response
In response to the lawsuit, John Deere shared a press release of its own. The post, which highlights the company's recent steps toward expanding self-repair options for equipment owners, says the FTC's claims are "baseless" and driven by partisanship.
A portion of Deere's statement is below.
"This lawsuit, filed on the eve of a change in administration, ignores the company’s long-standing commitment to customer self-repair and the consistent progress and innovation we have made over time, including the launch of Equipment Mobile in 2023 and the previously announced launch of new capabilities for John Deere Operations Center later this year. The complaint is based on flagrant misrepresentations of the facts and fatally flawed legal theories, and it punishes innovation and procompetitive product design. John Deere will vigorously defend itself against this baseless lawsuit.
As FTC Commissioner Andrew Ferguson (soon to be the FTC’s Chairman) explained in his dissenting statement, the lawsuit 'appears to be the result of brazen partisanship,' 'lends to the suit the stench of partisan motivation,' and appears 'taken in haste to beat President Trump into office.'
Commissioner Ferguson went on to state that 'we simply do not have the evidence to file this complaint with any real confidence of our ultimate chance of success.' Commissioner Melissa Holyoak joined in Commissioner Ferguson’s dissenting statement, both of whom voted against the filing of the complaint.
'It is extremely disappointing that three commissioners of the FTC chose to file a meritless lawsuit on the eve of the transition to a new Administration,' said Denver Caldwell, John Deere's VP of Aftermarket and Customer Support.
'Our recent discussions with the commission have revealed that the agency still lacked basic information about the industry and John Deere’s business practices and confirmed that the agency was instead relying on inaccurate information and assumptions.'
As Commissioner Ferguson recognized, 'the commission should not expend taxpayer resources on lawsuits on the basis of an evidentiary record as underdeveloped as this one.' In fact, as recently as last week, John Deere was still receiving questions from the agency.
Consistent with Deere’s announced plans for the launch of additional self-repair capabilities, and at commission staff’s invitation to enter settlement discussions, the parties were engaged in active negotiations over a potential resolution to the investigation when the FTC filed the lawsuit.
As our equipment has become more technologically advanced, Deere has introduced a number of new innovations, tools, and resources to equip customers and independent repair technicians with the maintenance and repair needs of our equipment.
Deere remains fully committed to ensuring that customers have the highest quality equipment, reliable customer service and that they, along with independent repair technicians, have access to tools and resources that can help diagnose, maintain and repair our customers’ machines. Deere’s commitment to these ideals will not waiver [sic] even as it fights against the FTC’s meritless claims."
