On Tuesday, November 26, 2024, the Federal Trade Commission ("FTC") released a staff report examining the duration of software support commitments by manufacturers of 184 connected devices, ranging from "smart" phones to health monitors to home appliances. The report found that nearly 89% of manufacturer web pages failed to disclose how long these products would receive software updates, even though some products cease to function without continued manufacturer support. The report concluded that "depending on the facts" a failure to inform prospective purchasers of the duration of the warranty on certain products could violate the Magnuson Moss Warranty Act ("MMWA") or Section 5 of the FTC Act, suggesting a potential future enforcement push by the agency.
FTC's Examination of "Smart" Devices
The FTC staff report comes after a September 2024 study by Consumer Reports evaluated the policies of 21 appliance brands and found that only three disclosed how long they will guarantee updates to their appliances' software and applications. The FTC compiled a list of 184 connected devices from different manufacturers used for personal or family purposes; motor vehicles were specifically excluded from the list. FTC staff then used the manufacturer's product webpage only—disregarding warranty and other documentation—to try to find information about software support duration or end date, reasoning that the average consumer was unlikely to do a broader search for information. Using that methodology, only 11% of product web pages provided information about how long the product would receive software updates. Follow up Google searches yielded information about product support duration or end date for about 33% of the products.
The FTC staff report concluded that "[m]anufacturers' failure to disclose the duration of their software support commitments warrants further consideration by policymakers and law enforcers." According to the FTC staff, and "depending on the facts," the failure to inform prospective purchasers about the duration of software updates for products sold with written warranties could violate the MMWA. The FTC staff also warned that the failure to provide software updates could be a deceptive practice in violation of Section 5 of the FTC Act, and noted that when evaluating a manufacturer's failure to provide software updates or disclose limits on the duration of product support, "it is appropriate to consider the scope of injury caused by the failure, whether this injury is reasonably avoidable by consumers, and whether there may be any offsetting benefits arising from the failure to provide software updates or disclosures about the duration of software support."
Telematics And The Automotive Industry
The FTC's study comes at a time when motor vehicles increasingly rely on computer software updates to operate. Manufacturers have faced legal challenges related to over the air ("OTA") software updates, while some states have enacted regulations that require OEMs to compensate dealers for helping customers whose vehicles are subjected to an OTA update and to make certain disclosures to potential buyers concerning the OTA update capabilities of new vehicles. Concerns about continued support for vehicle telematics systems were heightened in 2022 when certain cellular telephone service providers announced plans to shut down 3G networks still used to support the installed telematics systems of some vehicles. OEMs were able to provide workarounds for vehicle owners, but infrastructure support is a critical consideration in deploying new products.
Likewise, the recent right to repair movement has put a spotlight on vehicle telematics systems that allow vehicle generated data to be transmitted wirelessly to OEMs and their dealers. Recent legislation in Massachusetts and Maine would require this information to be made available to vehicle owners and independent repair facilities; similar federal legislation has been proposed. OEMs have faced uncertainty with respect to these laws while they await a decision from a federal judge following a bench trial in June 2021 on challenges to the constitutionality of the Massachusetts right to repair law and while a working group convened by the Maine Attorney General's Office makes recommendations about enforcement of that state's law, set to take effect in early 2025.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
