Exploring the Allegations – What Led to the John Deere Class Action Lawsuit?
The lawsuit alleges that Deere has illegally monopolized the repair services market by using software locks to restrict access to its equipment. This is a practice that Motherboard has covered in the past and that lawmakers and the Biden administration have been pushing to crack down on.
Farmers say Deere and its dealerships make it uneconomical for them to repair their equipment. The farmers are seeking damages for their losses.
What Led to the Class Action Lawsuit?
Whether you’re a farmer or not, you know how important it is to have the ability to repair your equipment. But it’s a privilege many manufacturers don’t grant their customers. They often use software locks to prevent people from fixing their products or accessing critical components.
These restrictions have become a common practice for many tech and hardware companies. But they’re coming under increasing scrutiny and are becoming a big issue in the farm community. The lawsuit against John Deere is just the latest in many right-to-repair cases.
According to the complaint, Deere’s proprietary software makes it impossible for farmers or independent repair shops to access and work on their tractors. The lawsuit alleges that Deere’s monopoly on repair services is illegal. The case points to company filings that show Deere’s repair business is three to six times more profitable than machine sales, and it notes that the firm told investors that parts and services only make up about 20 percent of its total revenue.
The plaintiffs also claim that the firm limits customer options by consolidating dealership networks. They say that in 1996, there were 3,400 John Deere dealers; in 2021, only 1,544 remained. Most of those are owned by large dealership chains operating in multiple locations.
Why Are Farmers Taking Legal Action?
In the lawsuit filed, farmers argue that Deere monopolizes repairs on its equipment by locking access to software and repair tools. This prevents farmers from bringing technicians to work on John Deere tractors and other farm equipment. They also allege that Deere has consolidated its dealerships to eliminate competition and keep prices high for equipment repairs.
The lawsuit is part of a more significant movement that aims to force companies like Deere to make it easy for consumers to fix their products. As Motherboard previously reported, the legal battle is gaining traction at both the state and federal levels, with some lawmakers even supporting right-to-repair legislation.
According to experts, the class action lawsuit filed by other plaintiffs alleges that Deere is violating antitrust laws by tying farmers to its service centers, making it difficult for them to find someone else to work on their tractors. It also claims the company profits from this practice by charging premium repair prices.
In addition, the John Deere class action lawsuit seeks triple damages for the farmers involved in it. It will likely be consolidated with several other similar cases already underway. A judge has yet to issue a decision on the matter.
In a recent hearing, Deere attorneys sought to limit the scope of the case by arguing that indirect purchasers—farmers who buy their equipment from independent dealerships—are not entitled to recover damages in an antitrust case. The judge disagreed with this argument, and it will be up to the court to decide the case’s outcome.
What Are the Allegations in the Lawsuit?
The class action lawsuit alleges that John Deere illegally monopolizes the repair services market for its agricultural equipment. The lawsuit claims that the company is doing so by engineering software locks into increasingly computerized tractors and restricting access to critical digital repair tools to several dealerships, forcing farmers to rely on Deere-authorized technicians for repairs. The plaintiffs also claim that the monopoly keeps prices and profits high.
The suit alleges that these restrictions are not necessary or justified, and they violate antitrust laws by artificially tying customers to the company’s dealers for all maintenance and repair needs. It also alleges that the company conspires to exclude competition and impose a cartel-like structure on the market.
Deere has denied these allegations and filed a motion to dismiss the lawsuit in December, arguing that the farmers don’t adequately allege that they’ve been deceived. However, in a statement of interest, the Justice Department opposes that motion, citing the Supreme Court decision that upheld a 1992 Supreme Court ruling against Kodak’s attempt to limit copy machine repairs.
Farmers from across the country have joined this fight. In some states alone, the lawsuit names several regional John Deere dealership chains with several locations.
What Can Farmers Expect from the Lawsuit?
Across the country, farmers are becoming increasingly frustrated with John Deere’s repair policies. The company has gained a reputation for locking out independent farmers from accessing their equipment using software locks on tractors and limiting the repair tools they can buy or borrow.
As a result, many farmers are losing money and are struggling to make ends meet. Last month, some farms filed a class action lawsuit against the company for violating antitrust laws.
The lawsuit alleges that John Deere is unlawfully monopolizing the repair market by requiring that affiliated dealerships complete repairs. It also accuses the company of adding clauses to newer machines indicating that any attempt to perform a non-Deere repair without its approval will void warranties.
The plaintiffs say this prevents farmers from maximizing their profits by keeping their equipment in service longer and forcing them to pay for expensive dealership services.
In response to the lawsuit, Deere asked a federal court to dismiss it. In a recent filing, the DOJ sided with plaintiffs and forcefully disagreed with the company’s analysis of antitrust law. According to the DOJ, Deere misread a Supreme Court decision from 1992 that held that the sale of a product and its subsequent repair must be treated as a single transaction for purposes of antitrust law.
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