What farmers who hack their tractors can teach us about IoT
The big story this week in tech news was a well-reported piece on farmers in the Midwest breaking the terms of their agreements with John Deere by using unauthorized software to fix their tractors.
The fight between farmers and John Deere over the right to repair connected tractors has been playing out for years in the nation’s breadbasket, but this story brought it to the fore again. This time there’s a twist.
Previous stories were focused on how John Deere used copyright law to force farmers to pay for access to the software that ran their tractors. Essentially, John Deere told farmers they were at risk of running afoul of copyright law if they tried to fix their own tractors.
The farming giant argued that because software was intrinsic to the value of a connected tractor, copyright law meant farmers didn’t actually own the machine. Instead, John Deere granted farmers, “an implied license for the life of the vehicle to operate the vehicle.”
That argument didn’t hold water with the copyright office and several state legislatures, and the company changed its tactics. Now, according to the Motherboard article, farmers sign an agreement that forces them to go to John Deere if they want to have their tractors repaired.
A license agreement John Deere required farmers to sign in October forbids nearly all repair and modification to farming equipment, and prevents farmers from suing for “crop loss, lost profits, loss of goodwill, loss of use of equipment … arising from the performance or non-performance of any aspect of the software.” The agreement applies to anyone who turns the key or otherwise uses a John Deere tractor with embedded software. It means that only John Deere dealerships and “authorized” repair shops can work on newer tractors.
On last week’s podcast, I had a conversation with Phoebe Wilkinson, a partner at Hogan Lovells. Wilkinson handles class action litigation for big clients, and we spoke for a bit on the topic of warranties and license agreements that companies ask people to sign when they buy a connected device.
I am worried that in most cases when connected devices come with onerous clauses like those in the John Deere tractor, the only option a person has if they don’t agree to the terms is to not use the device. This may be fine for a $ 10 app, but it’s onerous for people who have purchased an expensive device that isn’t returnable or has a restocking fee associated with it.
There’s also the question of whether or not a consumer buying a tractor or a car even reads those terms. Or understands them.
On that last point, Wilkinson says she tells her clients to be as clear as possible up front in the buying process about how the company plans to use the data or if they plan to restrict consumers in a meaningful way. She points to the use of arbitration clauses as an example of how things can shift over time. Early efforts to implement arbitration clauses on consumers as part of an agreement could be hidden, but courts ruled against that.
Then companies disclosed their arbitration clauses up front and told consumers they could opt out, but said they would have to pay to send the item back or pay a restocking fee. Again, Wilkinson says, the courts said no to those terms.
“You really can’t put a burden on the consumer just to opt-out,” she says. “I can see something like [the implementation of opt-outs for arbitration clauses] happening for smart devices.”
So farmers who dislike John Deere’s terms going forward might have to buy their goods from another company such as Massey Ferguson.
Of course, there are plenty of people who aren’t in favor of arbitration clauses, which put more of the power in the hands of the larger corporation, but at least the courts have made it so consumers have a better sense of what they are getting into.
If Wilkinson is right, then customers buying connected devices that are really services will have that same option to decide if a John Deere tractor is the way to go.
In an ideal world, we’ll accrue more rights as consumers protecting us from a company interfering with a device’s operation or forcing onerous terms through these EULAs, but I think we’re going to have to wait a lot longer for that.