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A07006 Summary:

BILL NOA07006B
 
SAME ASSAME AS S04104-A
 
SPONSORFahy
 
COSPNSRLupardo, Magnarelli, Glick, Gottfried, Bronson, Rosenthal L, Steck, McDonald, Dickens, Reyes, Simon, Gunther, Seawright, Pheffer Amato, Niou, Colton, Griffin, Fall, Galef, Zinerman, Burke, Hunter, Woerner, Rivera J, Mamdani, Jackson, Forrest, Barron, Thiele, Miller B, Clark, Hevesi, Blankenbush, Jean-Pierre, Perry, Kim, Wallace, Carroll, Lunsford, Burdick, Gallagher, Jacobson, Burgos, Gibbs, Kelles, Gonzalez-Rojas, Zebrowski, Englebright, Stern
 
MLTSPNSRBraunstein, Davila, De La Rosa
 
Add §399-nn, Gen Bus L
 
Relates to the sale of digital electronic equipment; requires original equipment manufacturers to provide diagnostic and repair information.
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A07006 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A7006B
 
SPONSOR: Fahy
  TITLE OF BILL: An act to amend the general business law, in relation to the sale of digital electronic equipment and providing diagnostic and repair infor- mation   PURPOSE OR GENERAL IDEA OF BILL: This bill requires original equipment manufacturers (OEM) to make diag- nostic and repair information for digital electronic parts and equipment available to independent repair providers and consumers if such parts and repair information are also available to OEM authorized repair providers.   SUMMARY OF PROVISIONS: Section 1. Titled "Digital Fair Repair Act" Section 2. Adds a new § 399-nn of the General Business Law. 1. Definitions 2. Requires OEMs to make available, for purposes of diagnosis, mainte- nance, or repair, to any independent repair provider, or to the owner of digital electronic equipment manufactured by or on behalf of, or sold by, the OEM, on fair and reasonable terms, documentation, parts, and tools, inclusive of any updates to information. Nothing in this section requires an OEM to make available a part if the part is no longer avail- able to the OEM. For equipment that contains an electronic security lock or other security-related function, the OEM shall make available to the owner and to independent repair providers, on fair and reasonable terms,, any special documentation, tools, and parts needed to access and reset the lock or function when disabled in the course of diagnosis, maintenance, or repair of the equipment. Such documentation, tools, and parts may be made available through appropriate secure release systems. 3. Provides for limitations to the requirements. This section does not require an OEM to divulge a trade secret to an owner or an independent service provider; or alter the terms of any arrangement between =n OEM and authorized repair provider. It does not require on OEM or authorized repair provider to, make available parts, tools, or documentation for making modifications to digital electronic equipment. It also does not require an OEM or authorized repair provider to make available parts, tools, or documentation for certain public safety communications equip- ment used for emergency response or prevention. * any digital electronic equipment whose diagnosis, maintenance, or repair would be inconsistent with or in violation of federal law. * diagnosis, maintenance, or repair of any home appliance with a digital electronic product embedded within it. 4. Provides for specific exclusions from the provisions of the bill including, but not limited to, the following products: * motor vehicles and motor vehicle equipment; * medical devices; and * off road equipment including, but not limited to, farm and utility, forestry, industrial, construction, and mining equipment. 5. Provides that no original equipment manufacturer or authorized repair provider shall be liable for any damage or injury caused to digital electronic equipment by an independent repair provider or owner which occurs during the course of repair, diagnosis, maintenance, or modifica- tion, including but not limited to indirect, incidental, special or consequential damages; any loss of data, privacy or profits; or any, inability to use, or reduced functionality of, the digital electronic equipment. 6. Provides for enforcement by the Attorney General. Section 3. Effective date. This act shall take effect one year after it shall have become a law.   DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION: This version makes technical clarifications to the bill, including providing that the requirements will apply to products with a value over ten dollars, adjusted annually based on the consumer price index. Anoth- er adds that nothing in the section will require that an OEM or author- ized repair provider make available any parts, tools or documentation if the intended use is for making modifications to digital electronic equipment. Others provide that nothing in the section will require an OEM or authorized repair provider to make available parts, tools or documentation for 1) public safety communications equipment used for emergency response or prevention purposes by an emergency service organ- ization, 2) where it may be in violation of federal law such as with gaming and entertainment consoles, related software, and components, or 3) home appliances with digital electronics embedded within them. Manufacturers, distributors, importers, or dealers of off-road equipment are added to the exclusions, those to whom the requirements would not apply. Amendments also include extending the effective date of the bill from 120 days to one year after it shall have become a law.   JUSTIFICATION: This bill will protect consumers from the monopolistic practices of digital electronics manufacturers. This legislation will require manufacturers to make non-trade secret diagnostic and repair information available for sale third party repairers. Nothing prevents third party repairers from being technically competent to complete digital repairs other than the lack of information being withheld by manufacturers. In too many instances,, repairs of digital items are intentionally limited by the manufacturer. Manufacturers will require consumers to pay for repair services exclusively through their repair division or manu- facturer-authorized repair providers. The practices by manufacturers essentially create a monopoly on these repair services. These limited authorized channels result in inflated, high repair prices, poor service or non-existent service in rural areas and unnecessarily high turnover rates for electronic products. Another concern is the significant amount of electronic waste created by the inability to affordably repair broken electronics. Lack of competition in the digital repair industry creates high costs for consumers, businesses, and government operations, limits used equipment markets and results in the early retirement of equipment with a remaining useful life. This bill will open the digital repair market up to competition and all its consumer, entrepreneurial and envi- ronmental benefits.   PRIOR LEGISLATIVE HISTORY: A7416-A of 2019-20 (Lupardo)   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: This legislation will have no fiscal implications for the State.   EFFECTIVE DATE: This act shall take effect one year after it becomes law.
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A07006 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         7006--B
 
                               2021-2022 Regular Sessions
 
                   IN ASSEMBLY
 
                                     April 19, 2021
                                       ___________
 
        Introduced  by  M.  of  A.  FAHY, LUPARDO, MAGNARELLI, GLICK, GOTTFRIED,
          BRONSON,  L. ROSENTHAL,  STECK,  McDONALD,  DICKENS,   REYES,   SIMON,
          GUNTHER, SEAWRIGHT, PHEFFER AMATO, NIOU, COLTON, GRIFFIN, FALL, GALEF,
          ZINERMAN,   BURKE,   HUNTER,  WOERNER,  J. RIVERA,  MAMDANI,  JACKSON,
          FORREST, THIELE, B. MILLER, CLARK, HEVESI,  BLANKENBUSH,  JEAN-PIERRE,
          KIM, WALLACE, CARROLL, LUNSFORD, BURDICK, GALLAGHER, JACOBSON, BURGOS,
          GIBBS,   KELLES,  GONZALEZ-ROJAS,  ZEBROWSKI,  ENGLEBRIGHT,  STERN  --
          Multi-Sponsored by -- M. of A. BRAUNSTEIN, DAVILA  --  read  once  and
          referred to the Committee on Consumer Affairs and Protection -- recom-
          mitted  to the Committee on Consumer Affairs and Protection in accord-
          ance with Assembly Rule  3,  sec.  2  --  committee  discharged,  bill
          amended,  ordered reprinted as amended and recommitted to said commit-
          tee -- reported and referred to the Committee on Codes -- reported and
          referred to the Committee on Rules -- Rules Committee discharged, bill
          amended, ordered reprinted as amended and recommitted to the Committee
          on Rules
 
        AN ACT to amend the general business law, in relation  to  the  sale  of
          digital  electronic  equipment  and  providing  diagnostic  and repair
          information
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1.  Short  title. This act shall be known and may be cited as
     2  the "digital fair repair act".
     3    § 2. The general business law is amended by adding a new section  399-
     4  nn to read as follows:
     5    §  399-nn. Sale of digital electronic equipment; diagnostic and repair
     6  information.   1. Definitions. For the purposes  of  this  section,  the
     7  following terms shall have the following meanings:
     8    (a)  "Authorized  repair provider" means an individual or business who
     9  has an arrangement with the original equipment manufacturer under  which
    10  the original equipment manufacturer grants to the individual or business

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD06580-13-2

        A. 7006--B                          2
 
     1  a  license to use a trade name, service mark, or other proprietary iden-
     2  tifier for the purposes of offering the services of  diagnosis,  mainte-
     3  nance,  or  repair of digital electronic equipment under the name of the
     4  original  equipment manufacturer, or other arrangement with the original
     5  equipment manufacturer to offer such services on behalf of the  original
     6  equipment  manufacturer.  An  original equipment manufacturer who offers
     7  the services of diagnosis, maintenance, or repair  of  its  own  digital
     8  electronic  equipment, and who does not have an arrangement described in
     9  this subdivision with an unaffiliated individual or business,  shall  be
    10  considered an authorized repair provider with respect to such equipment.
    11    (b)  "Digital  electronic  equipment" or "equipment" means any product
    12  with a value over ten dollars, adjusted annually by the rate  of  change
    13  in  the  consumer price index as reported by the bureau of labor statis-
    14  tics of the United States department of  labor,  that  depends  for  its
    15  functioning,  in whole or in part, on digital electronics embedded in or
    16  attached to the product.
    17    (c) "Documentation"  means  any  manual,  diagram,  reporting  output,
    18  service  code description, schematic diagram, security codes, passwords,
    19  or similar kinds of information used in effecting the services of  diag-
    20  nosis, maintenance, or repair of digital electronic equipment.
    21    (d)  "Fair  and reasonable terms" means making available parts, tools,
    22  or documentation as follows:
    23    (i) With respect to documentation, that  such  documentation  is  made
    24  available  by  the  original equipment manufacturer at no charge, except
    25  that, when the documentation is requested in physical  printed  form,  a
    26  charge  may be included for the reasonable actual costs of preparing and
    27  sending the copy.
    28    (ii) With respect to tools, that such tools are made available by  the
    29  original  equipment  manufacturer  at  no  charge  and without requiring
    30  authorization or internet access for use or operation of such  tool,  or
    31  imposing impediments to access or use of the tool to diagnose, maintain,
    32  or repair and enable full functionality of digital electronic equipment,
    33  or in a manner that impairs the efficient and cost-effective performance
    34  of  any  such  diagnosis, maintenance, or repair, except that, when such
    35  tool is requested in physical form, a charge may  be  included  for  the
    36  reasonable, actual costs of preparing and sending such tool.
    37    (iii) With respect to parts, that such parts are made available by the
    38  original  equipment  manufacturer, either directly or through an author-
    39  ized repair provider, to independent  repair  providers  and  owners  at
    40  costs  and  terms  that  are  equivalent to the most favorable costs and
    41  terms under which an original equipment manufacturer offers the part  to
    42  an authorized repair provider and which:
    43    A.  accounts  for any discount, rebate, convenient and timely means of
    44  delivery, means of enabling fully restored  and  updated  functionality,
    45  rights  of  use, or other incentive or preference the original equipment
    46  manufacturer offers to an authorized repair provider, or any  additional
    47  cost,  burden, or impediment the original equipment manufacturer imposes
    48  on an owner or independent repair provider;
    49    B. is not conditioned on  or  imposing  a  substantial  obligation  or
    50  restriction  that  is not reasonably necessary for enabling the owner or
    51  independent repair provider to engage in the diagnosis, maintenance,  or
    52  repair  of  digital  electronic  equipment  made  by or on behalf of the
    53  original equipment manufacturer; and
    54    C. is not conditioned on an arrangement described in paragraph (a)  of
    55  this subdivision.

        A. 7006--B                          3
 
     1    (iv)  Such  parts, tools, and documentation shall be made available to
     2  an authorized repair provider, and shall further be made available by an
     3  authorized repair provider to any independent repair provider or  owner,
     4  provided that such authorized repair provider is contractually and prac-
     5  tically  permitted  by  the original equipment manufacturer to sell such
     6  parts, tools, and documentation to any independent  repair  provider  or
     7  owner,  and  provided  further that such original equipment manufacturer
     8  shall not:
     9    A. retaliate against or hinder the ability of  any  authorized  repair
    10  provider  to sell such parts, tools, or documentation through any means,
    11  including advertising restrictions  or  product  allocation  limitations
    12  unrelated to legitimate product shortages; or
    13    B. condition or impose a substantial obligation or restriction that is
    14  not  reasonably  necessary  for enabling the owner or independent repair
    15  provider to engage in the diagnosis, maintenance, or repair  of  digital
    16  electronic  equipment  made  by  or  on behalf of the original equipment
    17  manufacturer.
    18    (e) "Independent repair provider"  means  an  individual  or  business
    19  operating  in this state, that does not have an arrangement described in
    20  paragraph (a) of this subdivision with an original equipment manufactur-
    21  er, and who is engaged in the services  of  diagnosis,  maintenance,  or
    22  repair of digital electronic equipment.
    23    (f) "Manufacturer of motor vehicle equipment" means a business engaged
    24  in  the  business of manufacturing or supplying components that are used
    25  in the manufacture, maintenance, or repair of a motor vehicle.
    26    (g)  "Medical  device"  means  an  instrument,  apparatus,  implement,
    27  machine,  contrivance,  implant,  or  other  similar or related article,
    28  including a component part, or accessory,  as  defined  in  the  federal
    29  Food,  Drug  and  Cosmetic  Act, 21 USC, Section 321 (h) as amended from
    30  time to time, which is intended for use in the diagnosis of  disease  or
    31  other  conditions,  or in the cure, mitigation, treatment, or prevention
    32  of disease, in man or other animals.
    33    (h) "Motor vehicle" means a vehicle that is designed for  transporting
    34  persons  or  property  on  a  street  or highway and is certified by the
    35  manufacturer under all applicable federal safety and emissions standards
    36  and requirements for distribution and sale in the United States.
    37    (i) "Motor vehicle dealer" means an individual or business who, in the
    38  ordinary course of business, is engaged in the business  of  selling  or
    39  leasing  motor vehicles to an individual or business pursuant to a fran-
    40  chise agreement, has obtained a license under the  vehicle  and  traffic
    41  law, and is engaged in the services of diagnosis, maintenance, or repair
    42  of  motor  vehicles  or motor vehicle engines pursuant to such franchise
    43  agreement.
    44    (j) "Motor vehicle manufacturer" means a business engaged in the manu-
    45  facturing or assembling of motor vehicles.
    46    (k) "Original equipment manufacturer" means any individual or business
    47  that, in the normal course of business, is engaged in  the  business  of
    48  selling  or  leasing  digital electronic equipment manufactured by or on
    49  behalf of itself, to any individual or business.
    50    (l) "Owner" means an  individual  or  business  that  owns  or  leases
    51  digital electronic equipment purchased or used in this state.
    52    (m) "Part" means any replacement part, either new or used, made avail-
    53  able by an original equipment manufacturer for purposes of effecting the
    54  services  of maintenance or repair of digital electronic equipment manu-
    55  factured or sold by the original equipment manufacturer.

        A. 7006--B                          4
 
     1    (n) "Tool" means any software program, hardware  implement,  or  other
     2  apparatus  used  for  diagnosis, maintenance, or repair of digital elec-
     3  tronic equipment, including software or other mechanisms  that  provide,
     4  program,  or  pair a part, calibrate functionality, or perform any other
     5  function  required  to  bring  the equipment or part back to fully func-
     6  tional condition, including any updates.
     7    (o) "Repair" means any act needed to restore digital electronic equip-
     8  ment or equipment to fully working order.
     9    (p) "Maintenance" means any act necessary to  keep  currently  working
    10  digital electronic equipment or equipment in fully working order.
    11    (q)  "Diagnosis"  means the process of identifying the issue or issues
    12  that cause digital electronic equipment or equipment to not be in  fully
    13  working order.
    14    (r)  "Modifications" or "modify" means any alteration to digital elec-
    15  tronic equipment that is not maintenance and not a repair.
    16    2. Requirements. (a) For digital electronic equipment  and  parts  for
    17  such  equipment  that are sold or used in this state, an original equip-
    18  ment manufacturer shall make available to any independent repair provid-
    19  er and owner of digital  electronic  equipment  manufactured  by  or  on
    20  behalf  of  or sold by such original equipment manufacturer, on fair and
    21  reasonable terms, any documentation, parts, and tools required  for  the
    22  diagnosis,  maintenance,  or repair of such digital electronic equipment
    23  and parts for such equipment.   Such  documentation,  parts,  and  tools
    24  shall  be  made  available  either  directly  by such original equipment
    25  manufacturer or via an authorized repair provider.
    26    (b) For equipment that contains an electronic security lock  or  other
    27  security-related  function,  the  original  equipment manufacturer shall
    28  make available to any owner and independent repair provider, on fair and
    29  reasonable terms, any special documentation, tools, and parts needed  to
    30  access  and  reset  the  lock or function when disabled in the course of
    31  diagnosis, maintenance, or repair of such equipment.    Such  documenta-
    32  tion,  tools, and parts may be made available through appropriate secure
    33  release systems.
    34    3. Limitations. (a) Nothing in this  section  shall  be  construed  to
    35  require  an  original equipment manufacturer to divulge any trade secret
    36  to any owner or independent service provider.
    37    (b) Nothing in this section shall be construed to alter the  terms  of
    38  any  arrangement  described  in paragraph (a) of subdivision one of this
    39  section in force between an authorized repair provider and  an  original
    40  equipment  manufacturer,  including, but not limited to, the performance
    41  or provision of warranty or recall repair work by an  authorized  repair
    42  provider  on  behalf  of  an original equipment manufacturer pursuant to
    43  such arrangement, except that any provision in such terms that  purports
    44  to  waive,  avoid, restrict, or limit the original equipment manufactur-
    45  er's obligations to comply with this section shall  be  void  and  unen-
    46  forceable.
    47    (c)  Nothing in this section shall be construed to require an original
    48  equipment manufacturer or an authorized repair provider to provide to an
    49  owner or independent repair provider access to information,  other  than
    50  documentation,  that  is provided by the original equipment manufacturer
    51  to an authorized repair provider pursuant to the terms of an arrangement
    52  described in paragraph (a) of subdivision one of this section.
    53    (d) Nothing in this section shall be construed to require an  original
    54  equipment  manufacturer  or authorized repair provider to make available
    55  any parts, tools or documentation  for  the  purposes  of  modifying  or
    56  making modifications to any digital electronic equipment.

        A. 7006--B                          5

     1    (e)  Nothing in this section shall be construed to require an original
     2  equipment manufacturer or authorized repair provider to  make  available
     3  any  parts,  tools, or documentation required for the diagnosis, mainte-
     4  nance, or repair of public safety communications equipment, the intended
     5  use  of  which  is  for  emergency response or prevention purposes by an
     6  emergency service organization such  as  a  police,  fire  or  emergency
     7  medical services agency.
     8    (f) Nothing in this section shall be construed to require any original
     9  equipment  manufacturer  or authorized repair provider to make available
    10  any parts, tools, or documentation required for the  diagnosis,  mainte-
    11  nance,  or  repair  of  digital electronic equipment in a manner that is
    12  inconsistent with or in violation of any federal law, such as gaming and
    13  entertainment consoles, related software and components.
    14    (g) Nothing in this section shall be construed to require any original
    15  equipment manufacturer or authorized repair provider to  make  available
    16  any  parts,  tools, or documentation required for the diagnosis, mainte-
    17  nance, or repair of any home appliance that  has  a  digital  electronic
    18  product  embedded  within  it, including, but not limited to, refrigera-
    19  tors, ovens, microwaves, air conditioning and heating  units,  including
    20  any related software and components.
    21    4. Exclusions. Nothing in this section shall apply to:
    22    (a) a motor vehicle manufacturer, manufacturer of motor vehicle equip-
    23  ment, or motor vehicle dealer acting in such capacity, or to any product
    24  or  service of a motor vehicle manufacturer, manufacturer of motor vehi-
    25  cle equipment, or motor vehicle dealer acting in such capacity;
    26    (b) a medical device, as defined in this section, or a  digital  elec-
    27  tronic product found in a medical setting including diagnostic, monitor-
    28  ing, or control equipment or any product or service that they offer; or
    29    (c)  a  manufacturer, distributor, importer, or dealer of any off-road
    30  (non-road) equipment, including but not limited  to,  farm  and  utility
    31  tractors,  farm  implements,  farm machinery, forestry equipment, indus-
    32  trial equipment,  utility  equipment,  construction  equipment,  compact
    33  construction  equipment,  mining equipment, turf, yard and garden equip-
    34  ment, outdoor power equipment (including portable  generators),  marine,
    35  all-terrain  sports  and  recreational  vehicles (including racing vehi-
    36  cles),  stand-alone  or  integrated  stationary   or   mobile   internal
    37  combustion  engines, other power sources, (including without limitation,
    38  generator sets, electric/battery and fuel cell power), power tools,  and
    39  any  tools,  technology, attachments, accessories, components and repair
    40  parts for any of the foregoing.
    41    5. No original equipment manufacturer or  authorized  repair  provider
    42  shall be liable for any damage or injury caused to any digital electron-
    43  ic  equipment  by  an  independent repair provider or owner which occurs
    44  during the course of repair, diagnosis,  maintenance,  or  modification,
    45  including  but  not  limited  to,  any  indirect, incidental, special or
    46  consequential damages; any loss of data,  privacy  or  profits;  or  any
    47  inability  to  use,  or reduced functionality of, the digital electronic
    48  equipment.
    49    6. Enforcement by the attorney  general.  (a)  Whenever  the  attorney
    50  general shall believe from evidence satisfactory to the attorney general
    51  that  any  person, firm, corporation or association or agent or employee
    52  thereof has engaged in or is about to engage in any acts or practices in
    53  violation of this section, the attorney general may bring an  action  in
    54  the  name and on behalf of the people of the state of New York to enjoin
    55  such unlawful acts or practices and to obtain restitution of any  moneys
    56  or  property  obtained  directly or indirectly by any such acts or prac-

        A. 7006--B                          6
 
     1  tices in violation of  this  section.  In  such  proceeding  preliminary
     2  relief  may  be  granted under article sixty-three of the civil practice
     3  law and rules.
     4    (b) Except as provided herein, before any violation of this section is
     5  sought  to  be  enjoined,  the  attorney general shall give such person,
     6  firm, corporation,  or  association  against  whom  such  proceeding  is
     7  contemplated  notice  and an opportunity to show in writing, within five
     8  business days after the delivery of such notice, why proceedings  should
     9  not  be  instituted  against  such person, firm, corporation, or associ-
    10  ation.  Such notice by the attorney general shall be delivered by certi-
    11  fied mail and by first-class mail with proof of mailing. In any proceed-
    12  ing in which the attorney general seeks preliminary relief, such  notice
    13  shall  not  be required upon a finding by the attorney general that such
    14  notice and opportunity is not in the public interest.
    15    (c) In connection with any proposed proceeding under this section, the
    16  attorney general is authorized to take proof and make a determination of
    17  the relevant facts, and to issue subpoenas in accordance with the  civil
    18  practice law and rules.
    19    (d)  This subdivision shall apply to all acts or practices declared to
    20  be in violation of this section, whether or not subject to any other law
    21  of this state, and shall not supersede, amend or repeal any other law of
    22  this state under which the attorney general is authorized  to  take  any
    23  action or conduct any inquiry.
    24    (e)  Any person, firm, corporation or association or agent or employee
    25  thereof who engages in any  acts  or  practices  in  violation  of  this
    26  section shall be liable to a civil penalty of not more than five hundred
    27  dollars  for each violation, which shall accrue to the state of New York
    28  and may be recovered in a civil action brought by the attorney general.
    29    (f) Except in the instance of a dispute arising  between  an  original
    30  equipment  manufacturer  and  an  authorized  repair provider related to
    31  either party's compliance with an existing authorized repair  agreement,
    32  an  authorized  repair  provider  shall have all the rights and remedies
    33  provided in this section.
    34    § 3. This act shall take effect one year after it shall have become  a
    35  law.
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