Competition Commission cracks down on spare parts, repair monopolies

The days of manufacturers locking consumers into costly repair networks could be numbered after the Competition Commission unveiled sweeping new guidelines aimed at opening the multibillion rand repair, service and maintenance markets to greater competition.

The move signals the regulator’s strongest intervention yet in support of “right to repair” principles, with manufacturers facing increased scrutiny over practices that restrict access to spare parts, software, diagnostic tools and technical information.

The Guidelines on Repair, Service and Maintenance Aftermarkets extend principles previously applied to the automotive sector and reflect the commission’s view that similar competition concerns exist across electronics, appliances, medical equipment and other durable goods.

According to the commission, restrictions on access to key repair inputs may increase repair costs, reduce consumer choice and limit participation by independent service providers (ISPs), many of which are small and medium-sized businesses.

The intervention also responds to growing concerns that repair restrictions inflate costs for consumers, narrow repair options and contribute to mounting electronic waste by encouraging the replacement rather than repair of products.

Push for right to repair

The guidelines form part of a broader global shift towards “right to repair” principles and are intended to promote competition, support small repair businesses, extend product lifespans and improve access to affordable repair services.

They come amid growing local and international concerns about the environmental impact of electronic waste and the shortening lifespan of consumer products. Household spending on technology and durables in the third quarter of 2024 was R214-biillion and South Africa’s appliance or household durables market size is approximately R69-billion.

The commission noted that barriers to repair can discourage consumers from maintaining products and instead push them towards premature replacement, undermining both competition and sustainability objectives.

Under the new framework, the commission identifies access to spare parts as a central condition for effective competition.

It warned that agreements or practices that restrict access to spare parts through exclusive supply arrangements, refusals to supply, discriminatory terms, software locks or other indirect mechanisms will receive close scrutiny.

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Software locks, pricing practices under scrutiny

The regulator also flagged several forms of conduct that could amount to anti-competitive behaviour, including margin squeezes, tying and bundling arrangements, discriminatory pricing, restrictive accreditation systems, non-transparent pricing practices and warranty conditions that unnecessarily discourage consumers from using independent repairers.

A key focus of the guidelines is the growing use of technology to control repairs. The commission indicated that software restrictions preventing replacement parts from functioning without manufacturer approval, limiting access to firmware or diagnostic software, or otherwise obstructing independent repairs could be viewed as indirect restrictions on competition.

However, the commission acknowledged that not all restrictions are unlawful. Legitimate considerations such as consumer safety, cybersecurity, intellectual property protection, product quality and compliance with sector-specific regulations may justify certain limitations. Any restrictions would need to be proportionate and no more restrictive than necessary to achieve their stated objectives.

The commission said it expects the guidelines to be particularly relevant to manufacturers of mobile phones, tablets, gaming consoles, televisions, household appliances, medical equipment and backup power and water systems. Automotive aftermarkets remain governed by separate sector-specific guidelines already in force.

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Enforcement signal to manufacturers

The watchdog reiterated that it is not opposed to manufacturers participating in repair markets. Rather, its concern is with conduct that forecloses independent competitors, raises barriers to entry, increases consumer dependence on manufacturer-controlled repair channels or limits consumer choice.

The commission also noted that the Competition Tribunal may take existing guidelines into account when determining administrative penalties for anti-competitive conduct.

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