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By Jerri-Lynn Scofield, who has worked as a securities lawyer and a derivatives trader. She is currently writing a book about textile artisans.
Yesterday, Apple, perhaps the most prominent corporate opponent of a right to repair – announced a reversal in its repair policy.
Beginning next year, under the company’s new Self Service Repair program, consumers will be able to buy parts to repair their iPhones, as well as get access to repair manuals and other diagnostic tools. It’s expected that Apple will implement similar changes covering repair of other devices, including MacBooks and iPads, yet the company has yet to release any such plans, yet alone details. According to Apple:
The initial phase of the program will focus on the most commonly serviced modules, such as the iPhone display, battery, and camera. The ability for additional repairs will be available later next year.
And I’ll admit, although I noted in my post yesterday that I expected welcome news ahead on the right to repair front, I didn’t expect anything like this to happen quite so soon (see Naked Capitalism: Nurturing Our Community of Critical Thinkers During the Pandemic Years…And Some Good News Stories).
What’s Motivated Apple’s Volte Face?
What’s behind Apple’s move? Increased consumer pressure? Perhaps consumer concerns influenced Apple’s calculation, at least in part. After all, this summer, even Apple co-founder Steve Wozniak endorsed the right to repair, as I noted at the time (see Steve Wozniak Endorses the Right to Repair).
I think two other factors combined to convince Apple to mend its ways. First, in July, the new sheriff in town at the Federal Trade Commission (FTC), Lina Khan, backed by a Biden executive order, adopted a get tough on right to repair issues(see FTC Votes 5-0 to Crack Down on Companies For Thwarting Right to Repair). With Apple, along with John Deere, a poster child for right to repair foot-dragging, I’m speculating that Apple might be concerned that the FTC might be looking for a test case to signal its new resolve on right to repair issues.
The second reason: shareholder activism. As I wrote in October in Microsoft Endorses Right to Repair; Apple Doubles Down on Opposition:
As Grist reported last week, Bowing to investors, Microsoft will make its devices easier to fix:
In a first-of-its-kind victory for the right-to-repair movement, Microsoft has agreed to take concrete steps to facilitate the independent repair of its devices following pressure from its shareholders.
On Monday, Microsoft and the investor advocacy nonprofit As You Sow reached an agreement concerning a shareholder resolution As You Sow filed in June urging the tech company to analyze the “environmental and social benefits” of making device repair easier. After months of negotiations, Microsoft has agreed to comply — and then some. Not only will the company study how increasing access to the parts and information needed for repair can reduce its contributions to climate change and electronic waste, it has also agreed to act on the findings of that study by the end of next year.
Microsoft’s shift is the first of its kind and was in response to shareholder pressure. Let’s hope it’s not the last – especially given the burgeoning concern about climate change and other environmental issues, especially waste. Enacting a right to repair would help in mitigating climate change and environmental damage.
Yesterday, I was alerted to Apple’s action by an email from Nathan Proctor, senior right to repair campaign director for US PIRG, enclosing a statement. Proctor noted that the company’s announcement of its self service repair program followed its pledge last week to stop deactivating Face Time after independent third party repair services repaired an iPhone screen.
Proctor was careful not to overstate the significance of Apple’s latest move:
The new program isn’t as comprehensive as the Right to Repair reforms discussed in more than two dozen state legislatures this year would be. Given current public information, Apple still maintains a lot of proprietary control over repairs on its devices, although more details are emerging.
Nonetheless, Proctor recognized that Apple’s action represents a major milestone:
“This is a huge milestone for the Right to Repair. One of the most visible opponents to repair access is reversing course, and Apple’s move shows that what repair advocates have been asking for was always possible. After years of industry lobbyists telling lawmakers that sharing access to parts, service tools and manuals would result in safety, security and intellectual property risks, Apple’s sudden change indicates these concerns were overblown. Right to Repair is breaking through.
“Our coalition of tinkerers, fixers, repair shops, DIYers, and consumer and environmental advocates has forced one of the world’s biggest companies to change for the better. It’s a win for repair shops, it’s a win for consumers and it’s a win for the planet.
“As more and more manufacturers show that repair access is reasonable and doable, it should become clear to lawmakers that there are no more excuses. It’s time to give every American the Right to Repair, so everyone can fix all their products. That’s the way it should be.”
The Verge provides further details about what Apple has done, highlighting the importance of shareholder activism in advancing this result, in The shareholder fight that forced Apple’s hand on repair rights:
But Apple didn’t change its policy out of the goodness of its heart. The announcement follows months of growing pressure from repair activists and regulators — and its timing seems deliberate, considering a shareholder resolution environmental advocates filed with the company in September asking Apple to re-evaluate its stance on independent repair. Wednesday is a key deadline in the fight over the resolution, with advocates poised to bring the issue to the Securities and Exchange Commission to resolve.
Apple spokesperson Nick Leahy told The Verge that the program “has been in development for well over a year,” describing it as “the next step in increasing customer access to Apple genuine parts, tools, and manuals.” Leahy declined to say whether the timing of the announcement was influenced by shareholder pressure.
Activist shareholders believe that it was. “The timing is definitely no coincidence,” says Annalisa Tarizzo, an advocate with Green Century, the mutual fund company that filed the right-to-repair resolution with Apple in September. As a result of today’s announcement, Green Century is withdrawing its resolution, which asked Apple to “reverse its anti repair practices” and evaluate the benefits of making parts and tools more available to consumers.
Just how Apple will expand this new program beyond the initial two iPhone models is not yet known. Per The Verge:
Apple’s announcement of the program is light on details, including whether the program will be expanded beyond iPhone 12 and 13 as well as Mac computers using M1 chips, how much genuine parts will cost customers, and whether it will eventually make parts available for a wider range of repairs. Although the announcement implies it will, Leahy declined to confirm that the program will eventually be expanded to other iPhone models. Still, the announcement effectively fulfills Green Century’s request that Apple make significant changes to its repair policies to facilitate independent repair — assuming the tech giant follows through with it.
Yet what we can say at the point is that shareholder activism seems to have provided a key spur to change, with implications beyond the fight for a right to repair. According to The Verge:
Apple’s initial response to the Green Century resolution was less than conciliatory. Tarizzo says that on October 18 (30 days before the self service announcement), Apple submitted a “no action request” to the Securities and Exchange Commission asking the investor oversight body to block the proposal. According to Tarizzo, Apple’s argument before the SEC was that the proposal — that the company “prepare a report” on the environmental and social benefits of making its devices easier to fix — ran afoul of shareholder proposal guidance by infringing on Apple’s normal business operations.
However, earlier this month, the SEC issued new guidance concerning no-action requests that includes a carve-out for proposals that raise “significant social policy issues.” In other words, shareholders can bring resolutions that affect a company’s day-to-day business operations if those proposals raise issues with significant societal impact. Tarizzo believes that this change made it much more likely the SEC would side with Green Century rather than Apple, particularly since the mutual fund company connected the dots between increased access to repair and the fight against climate change. (Using devices as long as possible through maintenance and repair is one of the best ways to reduce the climate impact of consumer technology since the majority of the emissions associated with our gadgets occur during the manufacturing stage.)
“It wasn’t a guarantee that the SEC would side with us, but the new guidance indicates it’s very likely we would prevail,” Tarizzo says. “It effectively took away a lot of Apple’s leverage in the process.”
Now, Apple seems to have regained some leverage by announcing its new Self Service Repair program on the same day that Green Century was required to respond to the no-action request. Instead of arguing that the SEC should allow the shareholder resolution to move forward, Green Century is now withdrawing the resolution entirely.
The Verge notes that company’s typically ignore shareholder resolutions. But the combination of a more activist FTC and with more than half of U.S. states mulling new right to repair laws, the company may have read the tea leaves and decided it could no longer maintain its hardline stance on the issue.
What Comes Next?
Next step: keeping Apple’s feet to the fire to make sure its right to repair reversal represents a deep and genuine corporate shift rather than just the latest form of corporate greenwashing
And, whereas iPhone repair is surely significant, I want to know exactly what Apple intends to do about the rest of its product line: iPads and MacBooks.
In addition, another key concern is whether Apple’s newfound support for broadening customer access to cheap and easy repair will also carry over and influence other design decisions. At present, Apple is notorious for doing things, like using bespoke parts, and constructing and gluing its devices to make it difficult for consumers or independent third party repair services to fix the device when something goes wrong. Will its promise to allow anyone to get access to genuine Apple parts, at least for iPhones 12 and 13, extend to reevaluating how it constructs its devices to enable easy repair? That would mean abandoning its previous mindset that embraced throwing away devices and replacing them rather than extending their lifespans.
In the right to repair universe, maybe Apple’s capitulation will increase pressure on John Deere, another noted right to repair opponent, to reconsider its policies as well.
But beyond that, dare I hope that Apple’s capitulation bodes well for other shareholder activist initiatives – such as measures directed towards combating climate change. That would be some welcome news, given the failure of the COP26 summit to agree a program to confront the looming climate change disaster. I am of course well aware that only massive government-backed initiatives offer any promise of mitigating significantly, let alone averting – the dire climate catastrophe that looms ahead. But little looks on offer on that score at the moment.
So allow me to close on a wan note of cautious optimism, at least with respect to the right of repair. According to The Verge:
The result is a huge victory for Green Century and a validation for shareholder activism more broadly. Tarizzo says that while Apple’s new program “doesn’t go all the way where we want the company to go, we think it’s a significant enough step that it warrants a withdrawal. The fact they’ll be selling common replacement parts, tools, releasing repair manuals, it’s all very much in the spirit of what we were hoping to see happen.”
Certainly not an end result, perhaps. But perhaps a meaningful first step on the journey.