[co-author: Stephanie Kozol]*
On January 15, the Federal Trade Commission (FTC), Minnesota, and Illinois filed a lawsuit against Deere & Company (Deere). The complaint, which Michigan, Wisconsin, and Arizona have since joined, accuses Deere of creating and maintaining a repair services monopoly and engaging in anticompetitive business practices that interfere with farmers’ rights to repair their Deere agricultural equipment in violation of federal and state antitrust laws.
The complaint centers on Deere’s diagnostic and calibration tool, Service ADVISOR, which is only fully functional for Deere authorized dealers and repair facilities. According to the complaint, while a version of Service ADVISOR is available to farmers and independent repair facilities, it is neither robust nor effective. The lawsuit alleges that this version cannot diagnose, test, or calibrate for “restricted” repairs, creating unfair market conditions.
The complaint highlights “unfair steering practices,” claiming that these practices funnel farmers to Deere’s service, repair, and parts business lines. It asserts that farmers and independent repair facilities are unable to perform “restricted” repairs to their Deere equipment. “Restricted” repairs typically require access to the underlying software and/or coding. Consequently, farmers must rely on Deere’s network of authorized dealers to complete an ever-expanding list of “restricted” repairs, as the internal components of complex agricultural equipment are integrated through software.
According to the plaintiffs, authorized repair shops are not ideal for farmers who need to plant and harvest crops within short windows of opportunity. These authorized repair facilities are often slower, located farther distances from the farmers, and more expensive than independent repair facilities. The plaintiffs allege that Deere’s practices lead to inefficiencies for farmers who would prefer to repair their equipment themselves or use local independent repair shops and aftermarket parts.
In 2023, Deere and the farming industry attempted to resolve the issue of access to the Service ADVISOR tool by entering into a memorandum of understanding (MOU) with the American Farm Bureau Federation. The MOU aimed to benefit farmers and independent repair facilities across the U.S. and Puerto Rico by providing them with access to repair Deere equipment. Since the MOU, some states such as Colorado have enacted legislation requiring agricultural equipment manufacturers to provide repair tools and software to owners and independent repair facilities. However, according to the complaint, Deere has not made the fully functional Service ADVISOR tool available to farmers or independent repair providers since entering into the MOU.
The complaint also alleges several ways in which Deere’s practices create an anticompetitive repair environment, including:
- Requirement to use Deere authorized dealerships and repair facilities: Customers are restricted from using their own labor or the labor of their preferred repair service provider. This prevents farmers from planning a reliable planting, spraying, and harvesting schedule that would allow them to maximize their crop yields. Due to Deere’s monopoly on sales and services, farmers must spend more money on repairs and parts. Farmers also are forced to sacrifice efficiency and convenience due to this requirement.
- Control over the Large Tractor and Combine market in the U.S.: Deere is alleged to possess monopoly power over this market. As alleged by the plaintiffs, this is demonstrated directly through the company’s ability to “raise prices, reduce output, and degrade quality in [the Large Tractor and Combine market],” and indirectly by the company’s “dominant market shares…, as to which the barriers to entry are substantial.”
- Use of Deere Original Equipment Manufacturer (OEM) parts: Deere tractors require the usage of Deere “genuine” or “OEM” parts for repairs. These parts are only available through authorized dealers and repair centers, which forces farmers to use these authorized repair providers. The OEM parts allegedly are more expensive than aftermarket alternatives. This purportedly harms the secondary market and aftermarket manufacturers, restricts competition, reduces the availability of parts, and increases profits for Deere.
The complaint further alleges that these practices are intentional and strategic, approved by company executives, and designed to steer service and parts business away from equipment owners and independent repair facilities and toward Deere’s own dealers, thereby increasing the company’s parts and services revenue.
The causes of action in the complaint include violations of Section 2 of the Sherman Act, Section 5 of the FTC Act, and five state antitrust laws. The plaintiffs are requesting the court to: (a) declare that Deere’s conduct violates antitrust laws; (b) issue an injunction preventing Deere from engaging in similar conduct; (c) order Deere to make the full version of Service ADVISOR diagnostic software available to owners and independent repair facilities, including access to a helpdesk; and (d) impose civil penalties, fees, and costs.
Why It Matters
This lawsuit underscores the ongoing struggle between large equipment manufacturers and independent repair facilities and owners in the context of the broader “right to repair” movement.
It’s important to note that the FTC voted 3-2 along party lines to file the complaint against Deere in the last days of the Biden administration. One of the dissenting votes came from then-Commissioner Andrew N. Ferguson, who now serves as the chairman of the FTC. Ferguson authored a dissent critical of the decision to file the complaint, noting that it is premature due to ongoing negotiations between various government officials and Deere. Ferguson cannot withdraw the case without a majority vote of the commissioners, which presumably may occur if Republican Mark Meador is confirmed by the Senate. Even if the FTC settles or withdraws from the case, it will not affect the states’ decision to continue the litigation. The states involved have publicly acknowledged their commitment to proceed independently. This lawsuit is one to watch!
*Senior Government Relations Manager
