Planned obsolescence and consumer protection

By Dr. Marta Santos Silva

 

Nowadays, large corporations are taking advantage of the rapid technological and scientific development in product manufacturing to increase their sales and profits.

One of the business models being explored is the so-called “planned obsolescence”. Planned obsolescence can be defined as a production strategy through which companies plan and control a product’s lifespan, configuring products in such a way that they will stop working as well as they did before, or even entirely, right after the warranty period expires.

While “planned obsolescence” may imply a certain intent on the part of the manufacturer, more neutral and broader designations, such as “premature”, “negligent” or even “avoidable obsolescence” are sometimes used. These encompass the cases described above, but also all cases where the dysfunctionality of the product after a certain period was unintended by the producer and is a result of more general patterns of unsustainable production and consumption.

Consumers regard planned obsolescence in different ways. While some see it as a natural course of action that goods, once they are purchased, have an increasingly short lifespan, others are outraged at planned obsolescence practises, based upon a lack of business ethics, environmental concerns and disregard for consumer rights.

Under the Consumer Rights Directive, consumers can reasonably expect that the goods that have been delivered to them are in conformity with the contract and, particularly, that they display the quality and performance which are normal in goods of the same type. In connection to this, the same directive imposes on the seller or trader the obligation of providing, in a clear and comprehensible manner and prior to conclusion of the contract, sufficient information regarding the main characteristics of the goods or services, the existence of guarantees of conformity for goods, after-sales services and also the functionality of digital content and any interoperability of digital content with other hardware and software. This means that, prior to the conclusion of the purchase agreement, consumers must be clearly and sufficiently informed about the functionalities and lifecycle of the product, and particularly that those functionalities or that lifecycle may have been or could be manipulated through the use of (remotely operated) software.

Most companies currently provide such information using adhesion contracts, typically written in small lettering and complex legalese, thereby not fulfilling, in practice, the goal of the provision. The obligation of informing consumers should be made more effective through (digital) informative labels, which would allow consumers to quickly and intuitively comprehend such information, assisting them to take more informed decisions.

In addition to the right to information, other consumer rights which may be affected by planned obsolescence practices are the right to repair and warranty protection.

The fact that the right to repair is enforceable up to the expiry of the warranty is of relevance in cases of planned obsolescence, as there are claims that companies manipulate their products’ lifespan to coincide with the end of the warranty period. This means that, by the time the consumer would like to have the product repaired or replaced, they would no longer be able to do so.

A few opportunities for taking specific legislative action to counteract planned obsolescence have (so far) not been seized by the drafters of the new draft of the sale of goods directive. Such opportunities would be a recommended extension of liability periods beyond the two years, a prolongation of the reversal of the burden of proof in favour of the buyer, and a possible priority, in the hierarchy of consumer remedies, of the right to repair over the right to replacement.

Furthermore, the right to warranty is one of the topics that is currently being addressed by Product Liability Formation of the European Commission Expert Group on Liability and New Technologies, which is drafting a concept paper for the future Guidance on the Product Liability Directive 85/374/EEC, to be made available in mid-2019. One of the possibilities put forward was that a product upgrade (or even a product update) would lead to a new warranty period. This could be beneficial for consumers, who quite often see their products becoming obsolete after running a number of necessary updates.

Companies often also implement practices which make reparation during the warranty period more difficult. That is the case with Apple’s pentalobe screw, which is practically impossible to repair by other non-official repair service companies. The practical difficulties of having a product repaired nudges consumers to opt for the remedy of right to replacement, which, while it may be convenient for consumers, is not in line with the present, and pressing, circular economy strategy, nor with the UN sustainable development goals. Within this context, it is worth exploring whether servitisation, a business trend where producers move towards product-service systems under which they retain the ownership of the goods and lease them to consumers, could be the beginning of the end of the practice of planned obsolescence.

In a nutshell, planned obsolescence is a widespread business practice with relevance for consumer law, and it can no longer be disregarded. Taking advantage of this particularly favourable momentum for promoting sustainable practices is thus of vital importance to ensure that business growth is not achieved at the expense of basic consumer rights.