The licensing agreement for the embedded software in Tom Schwarz’s John Deere tractor has him frustrated.
“This contract between you and Deere defines every electronic part in the product as a licensed product and it demands total control over those parts, which of course the equipment is useless without. What Deere is effectively saying is you own the iron, you own the oil, we own everything else in here,” Schwarz said during his presentation at CropSphere in Saskatoon.
Schwarz is a farmer from south-central Nebraska who supports the right-to-repair movement, which calls for laws that would give people the right to fix their property.
During Schwarz’s keynote address, he read part of the license agreement contract for his Deere tractor to the crowd. It states that by activating or otherwise using the licensed product, you are accepting and agreeing to the terms of the licence agreement.
“It means that when you get into that tractor or combine and you turn the key on, you are agreeing to that contract,” Schwarz said.
“I bought the tractor but Deere says they still own it. But I don’t see them getting any (tax) assessment from the state at all on this. I’m paying all the taxes. So as far as I’m concerned, I own the tractor. But I can guarantee you that if you read though this contract Deere does not agree with you.”
He said the problems of “Draconian” contracts are not isolated to Deere because all of the big equipment manufacturers have similar contract provisions.
In 1998, a United States copyright law was established, called the Digital Millennium Copyright Act (DMCA).
It criminalizes production and dissemination of technology, devices, or services intended to circumvent measures that control access to copyrighted works.
Schwarz said companies that produce technology with a digital component were able to lobby provisions into the law that prevent third parties from producing parts or doing repairs on technology protected by copyright.
“What they’ve done effectively has been to create a monopoly. In the right-to-repair area we like to call it the circular monopoly,” Schwarz said.
He said the circular monopoly starts with new sales, which the stock price of manufacturing company is based upon.
“Stock price is driven by revenue and revenue is driven by new sales. So motivation of a company and leadership of a company is to sell more product, it’s not to do repairs,” Schwarz said.
But he said farmers tend not to have a disposable mentality and they want to make their capital investment go as far as possible.
“When faced with an option of buying a new tractor or repairing what they already have, farmers often want to fix what they already have,” Schwarz said.
The second step in the circular monopoly is to control service revenue.
“This is where it varies a little bit from computer and cellphones (also protected by the DMCA) because Apple completely controls service revenue on iPhones for instance. In farm equipment, it probably helps the dealer network more than it helps Deere, in terms of repairs,” Schwarz said.
He said third party competitors have forced equipment manufacturers to lower the price of hardware components over the past decade.
“But if we’re talking something in the technology area, you’re pretty much married to the company when it comes to repairs,” Schwarz said.
He said he has a John Deere 3000 RTK receiver sitting on a shelf in his shop and the only thing wrong with it is the Terrain Compensation Module is damaged. But when he took the receiver in to get fixed, Deere told him the module is no longer supported.
“Well, if it’s of no value, then why aren’t you allowing us access to the stuff to fix it?
In the end, if there is only one place you can go for service or repair, then there is really low motivation to provide quick or inexpensive service to you. That’s the problem with a monopoly,” Schwarz said.
He said the next step in the circular monopoly is to control the used equipment market.
“How many used Deere GPS receivers have you seen in a Case, AGCO, or even in their dealers? Probably none. They completely control that market, or generally do at least,” Schwarz said.
He said the right-to-repair movement has been able to lobby for some concessions in the DMCA, which has caused equipment manufacturers to create their extreme licensing agreements.
If farmers want to advocate for their right to repair their farm equipment, he said a good place to start is with local, provincial or state representatives.
“This is the level where we have connections, we have the advantage of personal relationships with our ministers or senators,” Schwarz said.
“It’s really hard for the lobbyist to come in from the big companies and fight that. Personal connections are a tough thing to overcome.”
Whereas advocating at a federal level plays to large equipment manufacturers’ strengths, because they are able to maintain expensive and prolonged lobbying pressure.