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The Competition Commission has set its sights on the electronics repair and maintenance market, warning that restrictions imposed by manufacturers on spare parts, repair information, software and diagnostic tools could be undermining competition, driving up costs for consumers and locking small businesses out of a growing aftermarket industry.The watchdog last week published draft guidelines on repair, service and maintenance aftermarkets for technology goods, marking a significant expansion of the “right-to-repair” programme beyond the automotive sector and into consumer electronics, appliances and other technology products.The proposed guidelines signal a tougher regulatory stance towards original equipment manufacturers (OEMs) that seek to control repair markets after products have been sold, particularly once warranties have expired.Competition Commission spokesperson Siyabulela Makunga said the guidelines are intended to provide certainty to the market about how the regulator will assess conduct in repair, service and maintenance aftermarkets when complaints are lodged.“The guidelines may also be used by market participants to assess their practices for whether they are aligned to the Competition Act. Through providing this clarity, the commission aims to promote more effective competition in these aftermarkets that expands consumer choice and lowers prices.”At the centre of the commission’s concerns is the degree of control manufacturers retain over products after they have been bought by consumers.The regulator argues that many consumers effectively become locked into a manufacturer’s repair network because access to original spare parts, technical manuals, software updates, diagnostic equipment and repair information is restricted.The commission’s draft guidelines identify practices that may raise competition concerns, including refusals to supply independent repairers with parts, discriminatory pricing arrangements, restrictions on access to technical information, and software controls that prevent replacement components from functioning unless authorised by manufacturers.The commission says such practices may limit consumer choice, increase repair costs and restrict opportunities for independent service providers to compete in repair and maintenance markets.The intervention comes as consumers increasingly choose to repair rather than replace electronic products amid mounting financial pressures and rising prices.Consumers are keeping smartphones, laptops, tablets, household appliances and other technology products for longer, creating a rapidly expanding aftermarket industry built around repairs, refurbishment and replacement parts.The commission believes greater competition in these markets could deliver significant economic benefits.Makunga said more competitive repair, service and maintenance markets would help lower costs for consumers while creating opportunities for small businesses.“The commission expects that more competitive repair, service and maintenance markets would have benefits for consumers and the economy,” he said. “Greater competition may lead to lower repair and maintenance costs and longer product lifespans before goods must be replaced.”The watchdog sees the reforms as an avenue to support small business development and broaden participation in growing aftermarkets.“Competitive repair, service and maintenance markets can also provide more opportunities for small businesses to participate in these aftermarkets, which are set to grow as consumers continue to purchase more electrical goods,” said Makunga.The regulator’s move reflects a broader global shift towards “right-to-repair” policies aimed at preventing manufacturers from exercising excessive control over repair ecosystems. Around the world, regulators and consumer advocacy groups have argued that consumers should be free to choose who repairs their products and should have access to affordable replacement parts and repair services.The issue has gained prominence as governments seek ways to reduce electronic waste and support the transition towards a circular economy.Makunga said international experience showed well-functioning repair and maintenance markets could produce environmental benefits in addition to economic gains.“International experience suggests that well-functioning repair, service and maintenance markets may contribute to environmental sustainability by reducing waste and support a more circular economy and innovations that support this aim,” he said.The commission’s latest intervention builds on lessons learnt from the automotive aftermarket guidelines introduced in 2021.Those guidelines sought to open South Africa’s vehicle repair market to greater competition by allowing motorists more freedom to choose service providers and parts suppliers without automatically jeopardising vehicle warranties.According to Makunga, the automotive experience demonstrated that restrictions imposed by manufacturers can have a significant effect on competition and consumer choice.“The automotive guidelines demonstrated that restrictions can significantly alter consumer choices and competitive outcomes in ways that disadvantage consumers and independent repairers,” he said.However, he added that the commission recognised there were circumstances in which restrictions may be commercially or technically justified.“The automotive guidelines also show that in certain cases restrictions on repairs may have sound commercial and technical grounds. The draft guidelines maintain this framework.”The commission has stressed that the proposed rules do not amount to a blanket prohibition on manufacturer controls. Instead, they seek to establish principles for determining when restrictions are legitimate and when they potentially contravene competition law.The draft guidelines also place a spotlight on pricing behaviour in aftermarkets. The regulator argues that OEMs should not prescribe minimum resale prices for spare parts, repair services, software or diagnostic tools, and has warned that excessive pricing by dominant firms could attract scrutiny under the Competition Act.Business Times
