Introduction

Between 2000 and today, an increasing number of consumer products—from watches¹ to cat litter boxes²—contain software and sensors to enable the products to connect to the internet and receive and transmit data. Internet-connected devices with software pose unique challenges for consumers' ability to select who maintains and repairs their products, often referred to as a right to repair.³ The ability of repair shops that are independent of the original manufacturers to access software and data has implications for copyright, consumer protection, competition, and cybersecurity laws.⁴

This report focuses on the repair of motor vehicles.⁵ As the complexity of motor vehicles has increased, conflict among manufacturers, repair service providers, and replacement part retailers regarding control over the repair process has also grown.⁶

A central issue of the motor vehicle debate is the extent to which third parties, such as independent repair shops, need to directly access motor vehicles' software and data in order to repair them. Vehicle manufacturers claim that providing access could harm consumers by potentially lowering the quality of repair services and increasing risks to cybersecurity and passenger safety.⁷ Vehicle manufacturers also claim that third parties accessing vehicle software without obtaining prior authorization would violate the manufacturers' intellectual property rights.⁸

Executive branch agencies have also weighed in on the debate. The National Highway Traffic Safety Administration (NHTSA) stated in 2023 that it "strongly supports the right to repair" and has also stressed that "whenever access to write or execute command functionality [of a motor vehicle] is contemplated, it is important to be vigilant to minimize [cybersecurity] risks."⁹

The White House, several executive branch agencies, consumer advocacy groups, and repair service providers contend that manufacturers' restrictions on accessing embedded software and/or data can lead to higher prices for consumers, shorter product life cycles, and greater environmental waste.¹⁰ The North American vehicle supplier trade association MEMA¹¹ claims that "unfairly restricting access to vehicle generated data and repair and replacement components" reduces competition and increases costs.¹² At the same time, the Federal Trade Commission (FTC) has advised vehicle manufacturers that it will "take action to protect consumers against the illegal collection, use, and disclosure of their personal data [collected from motor vehicles]."¹³

As an example of the relationships between federal and state government agencies' jurisdictions and policy considerations in the right-to-repair debate, this report discusses how the debate applies to the motor vehicle industry. This report describes technological developments in the motor vehicle industry, the post-sales segment of the motor vehicle industry (i.e., repair and maintenance parts and services), and the growing role of vehicle data within this sector. In addition, this report explains how federal competition, consumer protection, and copyright laws intersect in the right-to-repair debate more generally. This report also describes the status of laws enacted in Massachusetts and Maine aimed at facilitating the right to repair and H.R. 906, the Right to Equitable and Professional Auto Industry Repair Act (REPAIR Act). Finally, this report discusses options for Congress.

Motor Vehicle and Aftermarket Industries

The U.S. Department of Commerce's Bureau of Economic Analysis reports that in 2023, household purchases of motor vehicles and parts accounted for about $768 billion, or 4.2%, of the $18.6 trillion in total consumer expenditures.¹⁴ Motor vehicles and parts were the second-largest category of durable consumer goods expenditures in 2023.¹⁵ After consumers purchase motor vehicles, they also pay to maintain and repair them. The marketplace of goods and services after the initial sale of a vehicle is known as the aftermarket.

As Figure 1 indicates, between 2000 and 2023, prices increases in the motor vehicle aftermarket (i.e., parts, equipment, maintenance and repair services) were greater than price increases for new and used motor vehicles. During this period, price increases for motor vehicle maintenance and repair services were also greater than increases in the average price for all urban consumer products, a measure of inflation. Price increases for motor vehicle parts and equipment, however, generally grew at the same rate as the average price for all urban consumer products.

Figure 1. Consumer Price Increases for Vehicles: Purchases and Aftermarket Expenses Year 2000 Consumer Price Indices = 100

Sources: Bureau of Labor Statistics; St. Louis Federal Reserve. Notes: Consumer Price Indices for all urban consumers, annual, seasonally adjusted.

Several factors may be responsible for the increase in motor vehicle maintenance and repair service prices relative to inflation. For example, the increases may reflect the power of suppliers in a concentrated market to raise prices above a competitive rate.¹⁶ Alternatively, economists have noted that a combination of COVID-19 pandemic-related economic shocks and long-term factors has restricted supply of new motor vehicles and increased demand for repairs of older motor vehicles.¹⁷ The increased complexity of interconnected software and sensors in motor vehicles may have increased the costs of parts and labor needed to replace and repair them.

Vehicle Aftermarket Structure and Competition

As Figure 2 illustrates, the vehicle aftermarket comprises two types of sales channels:¹⁸ (1) independent channels and (2) original equipment manufacturer (OEM) channels. Each aftermarket channel contains two types of repair shops.

Figure 2. Structure of Motor Vehicle Aftermarket Industry

Source: CRS analysis of Exhibit 1 in Albert Waas et al., At the Crossroads: The European Aftermarket in 2030, Boston Consulting Group, European Association of Automotive Suppliers, Wolk After Sales Experts, Munich, March 2021, https://web-assets.bcg.com/36/39/e80d073a4067bfe89c7482d6db69/the-european-aftermarket-in-2030.pdf. Notes: OEM = original equipment manufacturer. This figure, for the sake of clarity, excludes vehicle parts wholesalers, which act as intermediaries between vehicle parts suppliers and workshops.

Within independent channels, body/maintenance shops may be (1) independent or (2) part of an insurance company's "direct repair network." With the exception of repairing and servicing air conditioners,¹⁹ federal laws do not require motor vehicle service technicians and/or mechanics to be certified. State requirements for certification vary. Some states require service technicians and/or mechanics to have professional licenses, while others require licenses for certain types of work, such as vehicle safety inspections.²⁰ Nevertheless, employers may require service technicians/mechanics to be certified.²¹

Mechanics in independent shops may receive certifications from organizations unaffiliated with OEMs, including the nonprofit National Institute for Automotive Service Excellence,²² Inter-Industry Conference for Auto Collision Repair,²³ and AAA.²⁴ When maintaining and/or repairing motor vehicles, shops within independent aftermarket channels generally use aftermarket parts (i.e., parts that work with multiple vehicles).

Participants in OEM channels specialize in producing/selling parts and/or repairing/servicing specific OEM makes and models. Within OEM channels, body/maintenance shops may be (1) certified by OEMs to work with the OEMs' specific motor vehicle makes and models and (2) units within dealerships franchised by the OEMs to sell and repair/service vehicles. OEM parts generally cost more than aftermarket parts.²⁵

Software-Defined Vehicles (SDVs)

Software in vehicles may support any of several functions.²⁹ These functions include (1) controlling the vehicle's safety and comfort features (e.g., climate control, mirrors, and windshield wipers),³⁰ (2) transferring energy from the vehicle's engine to its wheels to make it move,³¹ (3) informing and entertaining drivers with systems that provide such services as navigation and music streaming,³² and (4) assisting drivers via a set of in-vehicle technologies (i.e., advanced driver assisted systems, or ADAS) that, among other functions, detect blind spots, automate parking, and adapt headlight beams to outside conditions.³³

Many OEMs have published guidelines for repairing their vehicles. Some direct mechanics to perform diagnostic scans before and after repair work.³⁴

ADAS Costs of Repairs

In December 2023, AAA³⁶ published a study investigating additional repair costs that drivers incurred when ADAS cameras and sensors were damaged during a minor collision. The study found that ADAS "can add up to 37.6% to the total repair cost after a collision."³⁷According to AAA, several variables can affect repair costs of ADAS.³⁸

Some contend that OEMs may be limiting competition from aftermarket suppliers of ADAS parts. An insurance executive stated that OEM's patenting and branding of ADAS sensors and cameras limits competition from independent manufacturers.³⁹ In comments filed with the FTC for its Nixing the Fix report, LKQ Corporation, a supplier of aftermarket parts, stated that OEMs "generally enjoy exclusive supply relationships" with manufacturers of their ADAS sensors.⁴⁰

Telematics

Some industry analysts assert that the ability of OEMs to remotely diagnose and send software updates to motor vehicles via wireless internet networks may reduce maintenance costs for vehicle owners.⁴¹ At the same time, the ability to transmit and receive vehicle data presents opportunities for OEMs to generate post-sales revenue via subscription services.⁴² As discussed in the rest of this report, much of the vehicle right-to-repair debate hinges on issues of third-party access to vehicle software and data.

In 2012, Tesla became the first vehicle OEM to deliver software updates via wireless internet networks.⁴⁶ By 2022, several other OEMs reportedly had followed suit, offering updates for information and entertainment systems, navigation systems, and telematics platforms.⁴⁷

Beginning in 2014, pursuant to a memorandum of understanding (MOU) between various national motor vehicle industry groups (hereinafter "2014 Industry MOU"), OEMs must provide independent workshops with the same "telematics diagnostic and repair information that [OEMs provide] to dealers, necessary to diagnose and repair a customer's vehicle, and not otherwise available to an independent repair facility via the tools specified [in an earlier section of the MOU]."

The 2014 Industry MOU does not, however, apply to "telematics services or any other remote or information service, diagnostic or otherwise, delivered to or derived from the vehicle by mobile communications."⁴⁸

The extent to which, if at all, independent workshops' ability to access telematics and diagnostic data remotely, without seeking prior permission from or paying OEMs—including data unrelated to the repair and maintenance of vehicles—preserves competition in the motor vehicle aftermarket is at the heart of several policy debates described in this report.

Potential Direct OEM-Consumer Relationship and Bypass of Dealers

ABI Research estimates that as of 2023, in-person software updates cost OEMs $500 million per year.⁴⁹ OEMs pay for aftermarket services during the lifetime of a vehicle's warranty.⁵⁰ When consumers visit workshops and dealers to service their vehicles, the workshops and dealers receive payments from the OEMs.⁵¹ Automotive software company Modera stated that

[as OEMs] increasingly take ownership of customer relationships, which [had] belonged to dealerships ... [i]n this connected, direct-to-consumer landscape, the high margins of the servicing revenue stream from dealerships could be well eroded. Both OEMs and dealerships have to go over their revenue models and relationships with a [fine-tooth comb] for survival.⁵²

In 2022, the National Automobile Dealers Association (NADA), the trade association representing OEM dealers, released its Guiding Principles on Evolving Business Models and the Dealer Franchise System.⁵³ Among other positions, NADA states that it supports OEMs' free provision of wireless software updates related to repairs, safety and emission recalls, and vehicle performance improvements. NADA opposes OEMs' use of telematics to bypass dealer revenue-sharing by selling additional features directly to consumers.⁵⁴

Diagnostics, Telematics, and OEM Steering

In the context of the right-to-repair debate, some industry participants contend that telematics enable OEMs to steer consumers to workshops within the OEM aftermarket channel. Disagreement exists about whether access to real-time, remote access to vehicle data at zero or low cost affects aftermarket competition.⁵⁵

Allstate Insurance Company's Senior Vice President, Claims Design and Delivery, Donald Jones, has stated that "it is increasingly difficult for independent workshops to service newer, more technologically advanced cars without the same wireless access to car data that dealers have."⁵⁶ In April 2024, according to a survey of independent workshops nationwide that was commissioned by the Auto Care Association, 51% of respondents reported sending as many as five vehicles per month to an OEM dealer for repairs because of limits on their ability to access vehicle data.⁵⁷⁵⁸

However, the Alliance for Automotive Innovation (Auto Innovators)—a group representing OEMs and equipment manufacturers and suppliers—contends that

automakers already make available to independent repair businesses all the information needed to diagnose and repair a vehicle via [a] 2014 nationwide agreement guaranteeing repairers and vehicle owners access to the same repair and diagnostic information provided to auto dealers.⁵⁹

In a July 2023 letter to congressional committee leaders, three trade organizations—the Society of Collision Repair Specialists (SCRS), the Automotive Service Association (ASA), and Auto Innovators—stated that

70 percent of post-warranty vehicle repairs today happen outside the dealer network, while automakers' own certified collision networks are comprised of shops that are more than 70 percent non-dealer owned. In other words, competition is alive and well in the auto repair industry.⁶⁰

The organizations do not specify what percentage of post-warranty vehicle repairs are made by shops that are not OEM certified.

Executive Branch Oversight of Aftermarket

The authority of various federal agencies to regulate the activities of the motor vehicle industry—each with a different policy objective—further impacts the right-to-repair debate.

Federal regulations related to the motor vehicle industry cover safety, fuel, and emissions.⁶¹ The National Highway Traffic and Safety Administration (NHTSA), an agency within the Department of Transportation, oversees vehicle safety⁶² and issues the Corporate Average Fuel Economy (CAFE) standards.⁶³ The Environmental Protection Agency (EPA) regulates vehicle emissions.⁶⁴

In addition, the U.S. Department of Commerce's Bureau of Industry and Security regulates the export of goods and technologies for national security and foreign policy purposes.⁶⁵ In March 2024, BIS issued an advance notice of proposed rulemaking (NPRM) seeking, among other things, comment on national security risks associated with connected vehicles.⁶⁶

With respect to the motor vehicle aftermarket, antitrust, competition, and consumer protection laws govern the conduct of industry participants. The antitrust laws are the Sherman Act, enacted in 1890, and the Clayton Antitrust Act of 1914.⁶⁷ While both the U.S. Department of Justice (DOJ) and the FTC enforce antitrust laws, this report primarily focuses on the FTC's role and authority.

Federal Trade Commission

The Federal Trade Commission Act of 1914, as amended (FTC Act), sets forth the agency's dual mission of protecting consumers and promoting competition.⁶⁸ Section 5(a)(1) prohibits "unfair methods of competition" and "unfair or deceptive acts or practices" (UDAP).⁶⁹ Specifically, the "unfair methods of competition" standard prohibits conduct that violates the Sherman and Clayton Acts, as well as conduct that does not meet the technical requirements of those statutes.⁷⁰

In exercising its UDAP authority, the FTC cannot declare an act or practice unlawful on the grounds that it is "unfair unless the act or practice causes or is likely to cause substantial injury to consumers which is not reasonably avoidable by consumers themselves and not outweighed by countervailing benefits to consumers or to competition."⁷¹ The FTC defines "deceptive" practices as those "involving a material representation, omission or practice that is likely to mislead a consumer acting reasonably in the circumstances."⁷² Such deceptive practices may include sharing of vehicle data with third parties without obtaining consumers' prior consent.⁷³

In addition to initiating enforcement actions against individual companies to determine whether practices are unfair or deceptive, the FTC may proactively use trade regulation rules to address common UDAPs.⁷⁴ Section 18(a)(1)(B) of the FTC Act (15 U.S.C. §57a(1)(B)) authorizes the FTC to prescribe "rules which define with specificity acts or practices which are unfair or deceptive acts or practices in or affecting commerce (within the meaning of section 5(a)(1) of [the FTC Act; 15 U.S.C. §45(a)(1)])."⁷⁵ The FTC must have reason to believe that the practices to be addressed by the rulemaking are "prevalent" (15 U.S.C. §57a(b)(3)) before initiating a proceeding.⁷⁶ 

Magnuson-Moss Warranty—Federal Trade Commission Improvement Act

The FTC also enforces certain consumer protection statutes that prohibit specific practices. These statutes generally specify that violations are to be treated as if they were UDAP under Section 5(a) of the FTC Act and as violations of trade regulation rules issued under Section 18 of the FTC Act.⁷⁷ Retail consumers' rights with respect to products they purchase are covered by the Magnuson-Moss Warranty—Federal Trade Commission Improvement Act, as amended⁷⁸ (or "MMWA"), which Congress enacted in 1975. Section 102(c) of the MMWA prohibits a warrantor of a consumer product from conditioning its warranty on the consumer using any article or service that is identified by brand name unless the article or service is provided for free or the warrantor obtains a waiver from the FTC (the "tying prohibition").⁷⁹

In May 2021, the FTC, at the direction of Congress,⁸⁰ published a report on industry practices in several aftermarkets, including the motor vehicle aftermarket.⁸¹ The FTC found that based on information the agency gathered to prepare the report, "it is clear that repair restrictions have diluted the effectiveness of Section 102(c) [of the MMWA] and steered consumers into manufacturers' repair [channels] or to replace products before the end of their useful lives."⁸² Nonetheless, the FTC, citing the 2014 Industry MOU found that "the car manufacturing industry has taken important steps to expand consumer choice."⁸³

In July 2021, the FTC announced that it would devote more enforcement resources to combating unlawful practices related to repair restrictions.⁸⁴ While noting that "current law does not provide for civil penalties or redress,"⁸⁵ the FTC stated that, among other actions, it would consider filing suit against violators of the MMWA to seek appropriate injunctive relief (i.e., a court restraint on a violator's illegal behavior). In addition, the FTC stated that it would scrutinize repair restrictions for potential violations of antitrust laws and assess whether those restrictions constitute unfair acts or practices.⁸⁶

In October 2022, after a public comment period, the FTC approved a final order against motorcycle manufacturer Harley-Davidson Motor Company Group, alleging that the company violated the MMWA by illegally restricting consumers' right to repair their vehicles.⁸⁷ Specifically, the FTC found that Harley Davidson had violated (1) the MMWA's tying prohibition, (2) the FTC Act's prohibition of deceptive conduct, and (3) the FTC's rule requiring OEMs to disclose all warranty terms in a single document.⁸⁸ The order requires Harley-Davidson to take multiple steps, including adding specific language to their warranties alerting consumers that using aftermarket parts or an independent workshop will not violate the company's warranty.⁸⁹

In April 2024, the FTC announced that it had created a form for consumers to report their warranty or repair stories related to "a wide range of products."⁹⁰

White House

In July 2021, President Joe Biden issued Executive Order 14306 called "Promoting Competition in the American Economy."⁹¹ Among other actions, the executive order stated "the Chair of the FTC, in the Chair's discretion, is also encouraged to consider working with the rest of the Commission to exercise the FTC's statutory rulemaking authority, as appropriate and consistent with applicable law, in areas such as ... unfair anticompetitive restrictions on third-party repair or self-repair of items."⁹²

In October 2023, the White House convened a roundtable discussion with federal and state officials, small business owners, and private-sector officials to discuss "the importance of the right to repair."⁹³ Several participants called on Congress to enact federal right-to-repair legislation.⁹⁴

Copyright Laws Related to the SDV Aftermarket

Copyright law may a restrict a user's ability to access or alter the software within SDVs. Copyright grants certain exclusive legal rights to authors of original creative works.⁹⁵ At least since 1980,⁹⁶ U.S. copyright law has protected computer programs as a type of literary work.⁹⁷ Thus, software developers may claim copyright in the code they write, just as writers may claim copyright in the books they author.⁹⁸ Copyright protection means that, generally speaking, authors of computer programs have the exclusive right to make copies of, or changes to, their code.⁹⁹ Third parties who reproduce, distribute, or adapt a copyrighted work without the copyright owner's permission are said to infringe the copyright and may be sued in court by the copyright holder for monetary damages or other legal remedies.¹⁰⁰

In addition to being a copyrighted work, computer code may be used to protect other copyrighted works. Owners of copyrighted content have sometimes used digital safeguards—known as technological protection measures (TPMs)—to prevent access to or uses of copyrighted works.¹⁰¹

The Digital Millennium Copyright Act and Section 1201

In 1998, Congress enacted Section 1201 of the Copyright Act of 1976, as amended (17 U.S.C. §1201), as part of the Digital Millennium Copyright Act (DMCA).¹⁰² Since 1998, the variety of products that incorporate software—including motor vehicles—has proliferated. Because computer code is a copyrightable work,¹⁰³ Section 1201 and other copyright laws generally prohibit persons from accessing vehicle software without first obtaining permission from OEMs.

In explaining how the internet prompted its consideration of copyright laws amendments, the House Committee on the Judiciary stated,

The digital environment now allows users of electronic media to send and retrieve perfect reproductions of copyrighted material easily and nearly instantaneously, to or from locations around the world. With this evolution in technology, the law must adapt in order to make digital networks [i.e., the internet] safe places to disseminate and exploit copyrighted works.¹⁰⁴

To enable copyright owners to protect their works, Section 1201 prohibits actions relating to two types of TPMs: "access controls" and "copy controls."¹⁰⁵ Access controls are technologies that limit the ability of users to access a copyrighted work, such as encryption on Blu-ray disks or authentication codes needed to play a video game or use licensed software.¹⁰⁶ Section 1201(a)(1), sometimes referred to as the "anti-circumvention prohibition," prohibits users from circumventing access controls.¹⁰⁷ Section 1201(a)(2) proscribes the manufacturing or trafficking of technologies and devices primarily designed to circumvent access controls.¹⁰⁸

Copy controls are technologies that protect the exclusive rights of the copyright holder after access to the work is obtained, such as by limiting the number of copies a user is able to make of a digital song or e-book they purchased.¹⁰⁹ Section 1201(b)(1) prohibits manufacturing or trafficking of technologies and devices primarily designed to circumvent copy controls.¹¹⁰ Section 1201 does not prohibit the circumvention of copy controls. However, reproducing a copyrighted work without authorization after circumventing copy controls may violate the copyright owner's exclusive rights under other provisions of the Copyright Act.¹¹¹ Copyright holders may sue in federal court for injunctive relief and money damages for violations of Section 1201.¹¹² They may seek either actual damages or statutory damages ranging from $200 to $7,500 per act of circumvention.¹¹³ Criminal remedies are available when people violate Section 1201 "willfully and for purposes of commercial advantage or private financial gain."¹¹⁴

Section 1201 Temporary Exemptions

Section 1201 empowers the Librarian of Congress to make temporary regulatory exceptions to the anti-circumvention prohibition, Section 1201(a)(1), for particular classes and uses of copyrighted works.¹¹⁵ The Librarian does not have comparable regulatory authority regarding Section 1201's prohibitions on the manufacturing or trafficking of circumvention devices.¹¹⁶ The Librarian makes these exceptions subsequent to a determination that particular users are "adversely affected by [the anti-circumvention prohibition] in their ability to make non-infringing uses."¹¹⁷ After examining several statutory factors, the Librarian bases such determinations on the recommendation of the Register of Copyrights. To make these recommendations, the Register conducts a public rulemaking proceeding every three years¹¹⁸ and consults the head of the U.S. Department of Commerce's National Telecommunications and Information Administration (NTIA).¹¹⁹ The exemptions currently in effect expire on October 27, 2024.¹²⁰

The Copyright Office reviews previously granted exemptions without meaningful opposition via a streamlined process.¹²¹ It reviews previously granted exemptions with meaningful opposition as well as petitions for new exemptions via a comprehensive review process.¹²² In June 2023, the Copyright Office initiated the ninth triennial rulemaking proceeding, for exemptions to become effective from October 2024 to October 2027.¹²³

Pursuant to an exemption approved by the Librarian in 2018 and 2021, a person may circumvent access controls on computer programs when doing so is a necessary step for diagnosing, maintaining, or repairing a motorized land vehicle, such as a personal automobile or commercial vehicle.¹²⁴ As part of its NPRM for the ninth triennial review, the Copyright Office notified the public, pursuant to the streamlined review process, that the Register intends to recommend that the Librarian of Congress renew this exemption for the 2024-2027 period.¹²⁵

In August 2023, MEMA petitioned the Copyright Office to consider a new exemption for circumvention of TPMs

on computer programs that are contained in and control the functioning of a lawfully acquired motorized land vehicle ... such as a personal automobile ... to allow lawful vehicle owners and lessees, or those acting on their behalf, to access, store, and share vehicle operational data, including diagnostic and telematics data.¹²⁶

In its NPRM, the Copyright Office requested comments on including an exemption for the class of works it describes as "Proposed Class 7: Computer Programs – Vehicle Operational Data."¹²⁷

Supporters of a New Copyright Exemption

In December 2023, both the Specialty Equipment Market Association (SEMA)¹²⁸ and MEMA filed comments supporting MEMA's proposed exemption.¹²⁹ MEMA contends that OEMs' exclusive control over vehicle-generated data (1) reduces competition in the aftermarket, thereby raising consumer prices, and (2) creates inefficiencies in the vehicle repair and maintenance processes by prolonging the lag time between diagnostics, parts ordering, and vehicle repair.¹³⁰

In March 2024, the DOJ and the FTC jointly filed a comment arguing that this exemption would further promote aftermarket competition.¹³¹ Specifically, the agencies stated that

[r]estricting access to non-copyrightable telematics data risks establishing a competitively harmful bottleneck by depriving users of the ability to share this data with aftermarket parts manufacturers, third-party maintenance and repair services, and other adjacent markets that would put such information to valuable commercial use. This restriction is unwarranted in light of the minimal risk of infringing use of copyrighted [motor vehicle software].¹³²

Opponents of a New Copyright Exemption

Four groups filed comments opposing this proposed exemption: (1) Auto Innovators,¹³³ (2) the National Association of Manufacturers (NAM),¹³⁴ (3) the Association of Equipment Manufacturers (AEM),¹³⁵ and (4) the "Joint Creators"¹³⁶ (collectively, the Entertainment Software Association [ESA],¹³⁷ the Motion Picture Association [MPA],¹³⁸ and the Recording Industry Association of America [RIAA]¹³⁹).

The groups contend that the exemption's proponents do not specify the relevant vehicle operational data or how they would use it.¹⁴⁰ In addition, they assert that third-party workshops "already have access to all necessary diagnostic and repair tools and information."¹⁴¹ Auto Innovators maintains that proponents' assertions that the currently available processes for accessing diagnostic information and tools are "burdensome or time-consuming ... [or] may take longer than circumvention should not validate claims that an exemption should be granted."¹⁴² Opponents further claim that granting a copyright exemption could put the Librarian in the position of preempting other federal laws and executive branch jurisdictions, including safety guidelines,¹⁴³ environmental regulations,¹⁴⁴ and privacy regulations.¹⁴⁵

Moreover, NAM claims that addressing right-to-repair policies via the Section 1201 triennial rulemaking process "would circumvent the legislative process at a time when both Congress and state legislatures across the country are considering how to balance manufacturers' intellectual property rights with consumers' desires to repair their equipment."¹⁴⁶ The Joint Creators suggest that if the Librarian, despite their objections, permits the exemption for Class 7, the exemption "explicitly exclude in-vehicle entertainment systems in the context of the repair exemption."¹⁴⁷

State Laws and Reactions: 2012-2024

2012-2014: Massachusetts Right-to-Repair Law and Industry MOU

In 2012, Massachusetts became the first state in the nation to enact a motor vehicle right-to-repair law.¹⁴⁸ The state did so both via a law enacted in July 2012¹⁴⁹ and a ballot measure approved by voters in November 2012.¹⁵⁰ In 2013, Massachusetts enacted a new version of automotive right-to-repair laws to reconcile conflict between the 2012 right-to-repair law and a ballot measure.¹⁵¹ The provisions of this 2013 law, which are codified in Chapter 93K of the Massachusetts General Laws, formed the basis of a national MOU reached by industry participants the following year (2014 Industry MOU, also described in "Telematics").

The 2013 Massachusetts law's definition of an "independent repair facility" includes OEM-certified workshops. A dealer is included in the definition of an independent repair facility with respect to motor vehicles unaffiliated with the dealer's franchise manufacturer; a dealer is excluded with respect to motor vehicles affiliated with the dealer's franchise manufacturer.¹⁵²

Failure to comply with the law "shall be deemed to be an unfair method of competition and unfair or deceptive act or practice in the conduct of trade or commerce" as defined elsewhere in Massachusetts' statutes.¹⁵³ Both dealers and independent workshops have the right to sue OEMs in the event they are unable to agree on a remedy for allegedly violating the 2013 law.¹⁵⁴

In 2014, using the text of the 2013 Massachusetts law as a model,¹⁵⁵ the Automotive Aftermarket Industry Association (AAIA), Coalition for Auto Repair Equality, Alliance of Automobile Manufacturers, and Association of Global Automakers, entered into a nationwide right-to-repair MOU (2014 Industry MOU).¹⁵⁶

Similarities Between 2013 Massachusetts Law and 2014 Industry MOU

The following are key provisions in the MOU that mirror those in the 2013 Massachusetts law:

• 1. For model year 2002 motor vehicles and thereafter, each OEM "shall make available for purchase by owners and independent repair facilities all diagnostic tools incorporating the same diagnostic, repair and wireless capabilities that [the OEM] makes available to its dealers."¹⁵⁷
• 2. For model year 2018 motor vehicles, each OEM "shall provide access to their onboard diagnostic and repair information system" and enable repair facilities to use a standardized diagnostic tool that would work on vehicles from multiple OEMs.¹⁵⁸
• 3. With the exception of "telematics diagnostic and repair information that [OEMs provide] to dealers, necessary to diagnose and repair a customer's vehicle, and not otherwise available to an independent repair facility via the tools specified [in an earlier section of the MOU], nothing in the [MOU] shall apply to telematics services or any other remote or information service, diagnostic or otherwise, delivered to or derived from the vehicle by mobile communications."¹⁵⁹

OEMs are not required to give third parties access to nondiagnostic and repair information provided within the terms and conditions of their franchise agreements with dealers.¹⁶⁰ If an independent repair facility or owner believes that an OEM has failed to provide the information or tool required by the MOU, it may challenge the OEM's actions by first notifying the OEM in writing.¹⁶¹ The OEM has 30 days from the time it receives the complaint to cure the failure.¹⁶²

Differences Between 2013 Massachusetts Law and 2014 Industry MOU

The following provisions of the 2014 Industry MOU are not in the 2013 Massachusetts law:

• The 30-day deadline for an OEM to remedy a complaint from an independent repair facility does not apply if the parties agree to an alternative time frame.¹⁶³
• Barring a satisfactory remedy from the OEM, an independent repair facility may appeal to a dispute resolution panel comprising representatives from each of the five signatory organizations.¹⁶⁴

The following provisions of the 2013 Massachusetts law are not in the 2014 Industry MOU:

• Model year 2013 vehicles (and thereafter) weighing more than 14,000 pounds—with limited exceptions—are included within the category of vehicles for which each OEM "shall make available for purchase by owners and independent repair facilities all diagnostic tools incorporating the same diagnostic, repair and wireless capabilities that [the OEM] makes available to its dealers."¹⁶⁵
• OEMs' ability to require dealers to purchase proprietary tools for accessing diagnostic, service, or repair information is limited if it provides, with more favorable terms and conditions, the same information to an independent repair facility or other third party via a standardized tool.¹⁶⁶

Debate Over Access to Telematics Data: 2015-2024

After the adoption of the 2014 Industry MOU, AAIA raised concerns about a stipulation in the MOU stating that OEMs need provide independent workshops with remote access to telematics data only if an alternative method does not exist.¹⁶⁷ AAIA claims that this provision constrains independent shops' ability to compete by requiring consumers to travel to the shop in order to get their vehicles diagnosed. In contrast, AAIA claims, consumers need not travel to dealers for a diagnosis, because OEMs share telematics data with them.¹⁶⁸ In addition, when OEMs diagnose vehicles remotely and notify drivers that they may need to get their vehicle serviced, they can include marketing messages that promote aftermarket services from dealers.¹⁶⁹

Auto Innovators counters that access to telematics data is unrelated to repair data and that initiatives seeking to include this access represent "a monetizable data grab from national aftermarket part manufacturers and retailers masquerading as consumer protection and support for small businesses."¹⁷⁰ Furthermore, the organization claims that enabling independent workshops to access vehicle data remotely could pose cybersecurity and privacy risks to drivers.¹⁷¹

2020 Massachusetts Data Access Law and Implementation

To support access to telematics data, Massachusetts Right to Repair—a coalition of independent vehicle workshops, vehicle part stores, and trade organizations—launched a campaign to update the Massachusetts right-to-repair law via a November 2020 ballot initiative.¹⁷² The initiative proposed, beginning with model year 2022 vehicles, requiring OEMs selling or leasing vehicles in Massachusetts to equip them with a standardized open data platform.¹⁷³ This platform would enable vehicle owners and independent repair facilities to access, via a mobile application, "any vehicle-specific data, including telematics system data, generated, stored in[,] or transmitted by a motor vehicle used for or otherwise related to the diagnosis, repair[,] or maintenance of the vehicle"¹⁷⁴ without obtaining prior authorization from OEMs.¹⁷⁵

In July 2020, in response to a request from Massachusetts legislators, the Deputy Administrator of NHTSA¹⁷⁶ submitted written testimony to the Massachusetts legislature addressing the proposed ballot initiative.¹⁷⁷ The agency expressed concerns that the ballot initiative would require "manufacturers to redesign their vehicles in a manner that necessarily introduces cybersecurity risks, and to do so in a timeframe that makes design, proof, and implementation of any meaningful countermeasure effectively impossible."¹⁷⁸ In November 2020, 71% of Massachusetts voters approved the initiative.¹⁷⁹

In 2021, Subaru and Kia disabled their telematics services for 2022 model year vehicles sold in Massachusetts.¹⁸⁰ A Subaru senior executive claimed that the company took this action because compliance with Massachusetts's law was "impossible," given that the data platform stipulated by the law did not exist and "will not exist any time soon."¹⁸¹

In June 2023, NHTSA advised 22 OEMs that the Massachusetts Data Access Law "conflicts with and therefore [is] preempted by the [National Traffic and Motor Vehicle Safety Act (Safety Act), 49 C.F.R. Chapter 301]" due to cybersecurity risks.¹⁸²

In August 2023, NHTSA and the Assistant Attorney General of the Commonwealth of Massachusetts publicly stated that NHTSA's "understanding that a platform that provides the required features, capabilities, and access using a short-range wireless protocol such as Bluetooth is one approach that a vehicle manufacturer might use to achieve compliance with the [Massachusetts] Data Access Law" and would therefore not be inconsistent with federal vehicle safety regulations.¹⁸³ NTHSA expressed concern about the implications of disabling telematics services. The agency stated that disabling telematics services "would disserve vehicle owner safety without advancing the right to repair."¹⁸⁴

2023 Maine Vehicle Right-to-Repair Law and Proposed 2024 Amendments

In November 2023, 84%¹⁸⁵ of participating Maine voters approved a ballot initiative that requires OEMs to standardize onboard diagnostic systems and enable independent repair facilities and owners to access the diagnostic systems (i.e., telematics data) remotely.¹⁸⁶ In addition, the law directs OEMs to equip certain motor vehicles with a standard access platform.¹⁸⁷

2023 Update to 2014 Industry MOU

In July 2023, organizations representing independent vehicle repair and service shops (ASA and SCRS) signed a separate MOU with Auto Innovators (2023 Industry MOU) updating the 2014 Industry MOU.¹⁸⁸ The 2023 Industry MOU affirms that motor vehicle owners and independent repair facilities can purchase repair and diagnostic systems that OEMs make available to authorized dealers on "fair and reasonable terms."¹⁸⁹ The 2023 Industry MOU specifies that motor vehicle owners and independent workshops do not have access to vehicle-generated data "beyond what is necessary to diagnose and repair a vehicle."¹⁹⁰ Owners' and independent workshops' access to diagnostics and repair data includes only what OEMs provide to their authorized dealers and "is not otherwise available through a tool or third-party service information provider."¹⁹¹

Organizations representing aftermarket suppliers and independent workshops who did not sign the 2023 Industry MOU claim the MOU's terms are insufficient to ensure competition in the motor vehicle aftermarket, in part because it does not oblige OEMs to provide vehicle owners or independent workshops direct access to telematics data.¹⁹²

Options for Congress

As congressional policymakers consider the ability for third parties to access software and data—including data unrelated to repair—in SDVs, they may weigh several options. They may decide that current federal laws are appropriate and allow federal government agencies to further develop and implement the proposed policies. In addition, lawmakers may opt to monitor actions by states, courts, and industry participants before taking further actions. Alternatively, congressional policymakers could increase oversight activities and direct the federal government agencies, through hearings, report language, or legislation, to take specific actions to reconcile potentially competing policy goals.

Observe Impact of Industry Participants' Private Negotiations

Lawmakers may prefer to observe the effect of the current MOUs between the OEMs, ASA, and SCRS on competition in the aftermarket.

Permit Current Federal and State Policy Framework to Develop

As states enact different versions of laws requiring OEMs to permit independent workshops to access motor vehicle data and software, lawmakers may wish to observe the impact on consumers (e.g., Subaru's and Kia's disabling of telematics services in Massachusetts) prior to taking action.

In addition, lawmakers may choose to wait for courts to assess whether current federal laws preempt such state laws. In November 2023, Auto Innovators filed a lawsuit in the U.S. District Court for the District of Massachusetts.¹⁹³ The lawsuit contends that the Massachusetts Data Access Law is unenforceable because it conflicts with federal laws,¹⁹⁴ including copyright laws (Section 1201 of the DMCA),¹⁹⁵ trade secret laws (the Defend Trade Secrets Act),¹⁹⁶ vehicle safety laws (the National Traffic and Motor Vehicle Safety Act),¹⁹⁷ and consumer data protection laws for financial institutions over which the FTC has jurisdiction (the Gramm-Leach-Bliley Act).¹⁹⁸ Auto Innovators stated that because OEMs routinely finance customers' purchase or lease of new vehicles, several of its members are considered by the FTC to be financial institutions for the purpose of enforcing the Gramm-Leach-Bliley Act.¹⁹⁹ Auto Innovators asked the court to "temporarily and permanently [enjoin] enforcement of the law."²⁰⁰ As of the publication date of this report, the judge presiding over the bench trial has not issued a ruling.²⁰¹

In addition, Members may observe or review the Librarian of Congress's expected forthcoming decision whether to extend the existing temporary exemption from copyright laws under the DMCA and/or establish a new exemption as proposed for the 2024-2027 time period.

Enact Federal Legislation

Congressional stakeholders might opt to create a federal standard regarding the access of consumers and third parties to motor vehicle software and data in order to avoid or reduce the potential for a patchwork of state approaches, increase regulatory certainty, and harmonize potentially competing policy goals of different government agencies.

Legislative approaches might consider what agency is best suited to oversee any such effort and to what extent, if any, coordination across agency boundaries might be necessary given the data-centric issues raised. For example, in March 2024, the U.S. Department of Commerce's Bureau of Industry and Security issued an advance NPRM seeking, among other things, comments on national security risks associated with connected vehicles. While the FTC and NHTSA may have expertise with regard to cybersecurity needs based on their oversight of U.S.-based firms, other agencies may have expertise based on their oversight of U.S. trade and international relations.

Such approaches might also address whether to permanently permit access data subject to TPMs under Section 1201 of the Copyright Act. The existing exemption afforded to diagnosing, maintaining, or repairing a motorized land vehicle is temporary and based on a regular triennial decisionmaking process, as described above.

In the 118^th Congress, H.R. 906, the Right to Equitable and Professional Auto Industry Repair Act (REPAIR Act), was introduced. It would specify that failure by OEMs to provide consumers and independent repair providers with access to "vehicle-generated data," "critical repair information," and tools needed to repair motor vehicles would constitute a violation of a regulation that, pursuant to Section 18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. §57a(a)(1)(B)), the FTC has the authority to prescribe.²⁰² In addition, the bill stipulates that the FTC, may, in consultation with NHTSA, "add additional types of data to the definition of vehicle-generated data under subsection (a)(20) regardless of whether those types of data are related to motor vehicle repair, taking cybersecurity and privacy into consideration, to allow consumers and their designees to directly access additional types of vehicle-generated data, and for additional purposes."²⁰³ On November 2, 2023, the House Committee on Energy and Commerce's Subcommittee on Innovation, Data, and Commerce forwarded the bill to the full committee by a voice vote.²⁰⁴