How John Deere Robs Farmers Of $4 Billion A Year

I'm a third generation Montana farmer-rancher. I raise registered black Angus. I also sell about a thousand ton of hay.

The operations of a new tractor are really nice. Modern equipment has a lot of sensors, electronic switches, these Powershift transmissions are wonderful. But during the busy season, the tractor kept shutting down for no reason.

It was weird, it would just randomly shut down. And so I thought maybe it was something in the fuel system. I changed the fuel filter.

But it kept doing it. So then I finally called our John Deere mechanic and he said, "Really the only way we can figure this out is we gotta hook up a computer and download the error codes. " And I said, "All right, can I come in and borrow it?

" "Oh, no, we don't do that. " I said, "Okay, I'll rent it. How much does it cost to rent it?

" "No, we don't rent it. " Well, I had hay ready to bale, and that's a critical time because if you get a little rain, it could wreck the quality of the hay. He says, "I can't get to you for a week.

" They aren't going to give me the tools to be able to fix it myself. I was stuck. John Deere is costing farmers and ranchers like Walter billions of dollars in lost income.

And what John Deere is doing affects you even if you're not a farmer. It has officially happened. Authorization denied.

A repair shop like mine, we're charging half what Apple would charge. Almost a whole entire paycheck just to swap out some handlebars. If I replace a component, it breaks something in the phone.

I just need a new battery, come on. Why is it so hard to repair the things we own? So this is the tractor?

Yep. This is the culprit. it was just randomly shutting down.

First thing we did was change the fuel filters in it, and it didn't really resolve the problem. So I was stymied at that point. That's the only thing that you basically have the ability to do without the John Deere software.

That's exactly right. Yeah. The first couple tractors I learned to drive on didn't have any electric controls.

It was all mechanical controls. But you know, those old tractors were pretty easy to diagnose if there was a problem. And, pretty easy to fix those problems.

When a modern John Deere tractor malfunctions, you can't diagnose the problem without John Deere software, But John Deere won't let farmers or independent mechanics use it. Only an authorized dealership. And I said, "All right, well, send your tech out.

Let's get it done. " Yeah. And he says, "Well, but we're pretty busy.

We might be able to do it a little faster if you brought it into our shop. " And that faster ended up being? A month.

In farming, time is of the essence. We have windows of opportunity where we can get our crop planted at the right time. Too early, you might damage the crop.

Too late, you might damage the crop. And then on top of that, you've got Mother Nature. If Walter didn't bale his hay quickly, he stood to lose hundreds of thousands of dollars.

On top of that, the repair wasn't cheap. The part itself was about 150, 160 dollars. And the labor to actually change that part was about 300 dollars.

But my bill was almost 5000. This is why those repair restrictions exist. Service and repair work can yield John Deere five times more profit than new equipment sales.

John Deere's profits grew by 61% in recent years and their CEO's salary grew by 160%. Was just a faulty sensor. Only took them, you know, a couple hours to swap it out.

Is that something you could have done yourself? Oh, certainly. Yep, yep.

As long as I had the software and the computer to reprogram the, the sensor. So you need the software both to diagnose the problem and then also make the actual part repair. Yeah, that's right.

That strategy of requiring software to install a new part, it's called parts pairing. And it was invented by Apple, who's been a real leader in the anti repair space. They also glue in phone batteries, so you can't just swap them out when they die.

And they use proprietary screws to make it harder to get into their product. Other companies have followed suit, making it more expensive for us to fix our devices, kitchen appliances, video game consoles, cars, and so much more. Harley Davidson Screamin' Eagle parts only, and only installed by Harley Davidson mechanics.

If you install anything on your motorcycle, your warranty is voided. Taylor, the manufacturer of McDonald's ice cream machines, makes 25% of their profits from repairs. So, like John Deere, they lock their machines' software so only an authorized technician can fix them.

And stores end up waiting weeks for one to arrive, which is why McDonald's soft serve machine is always broken. Y'all wonder why the ice cream machine's still broken. For three generations, Walter and his family have been fixing their own equipment.

But now, John Deere isn't just restricting them from doing so, they're arguing that farmers don't actually own their tractors. So a quick primer on property rights. If I go into a bookstore and buy a book, I can confidently say I own it.

I can do whatever I want with it. Read it. Lend it.

Resell it. I can even take a power tool to it and turn it into a lamp. This is all thanks to a very old provision of copyright law called the First Sale Doctrine.

Once a copy is sold to a member of the public, the publisher or the rights holder no longer has control over that copy. That's how we have public libraries in, in the United States, for example. It's why we have use record stores and Goodwill, The first sale doctrine draws a clear line between intellectual property and the personal property of consumers.

But in the digital age, that line is becoming blurry. If I go to Amazon's e-book store, I'm clicking a button that says buy and I'm paying them money. But according to Amazon, I didn't buy anything.

I only licensed it. When you frame a transaction as licensing, instead of selling, the consumer rights we get with the First Sale Doctrine don't apply anymore. Instead, those rights remain with, in this case, Amazon, who can put all sorts of restrictions on us.

So according to the contract I agreed to when I bought this book, I can only read this e-book using an Amazon-approved device, if I have an active Amazon account. I can't loan it, make copies of it, or resell it. And Amazon will make extra sure I don't do any of those things by putting digital locks on their e-books that would stop me if I tried.

It's like renting a book with an invisible string that ties it to the seller. That invisible string is called Digital Rights Management, or DRM, and you'll find it on almost every digital product: software, music, movies, books, video games. And if you figure out how to get around your e-book's DRM to lend it to a friend anyway, you'd be violating the Digital Millennium Copyright Act.

Companies are using the DMCA to justify lots of dystopian things, like slapping subscription fees onto our printers and toothbrushes. We dug into that in another video you can check out here. So this book I can lend this one.

I can't because I'd be violating copyright law? It doesn't really make sense. But John Deere is applying that same twisted legal logic to farmers who want to fix their equipment worth millions of dollars.

They told the Copyright Office that farmers aren't paying for the copyrighted software that runs their tractors. They're paying for a license to operate their tractors. Do you think it's fair that farmers and ranchers will pay $300,000 or $1 million to purchase a combine or a tractor to not own it?

We're not leasing it. We're, we're buying that. The gadgets that are in it are part of that equipment, and the technology that runs that gadgets is part of that equipment.

We thought when we bought that tractor that we bought that tractor lock, stock and barrel. Now you might be wondering, if farmers don't own their tractors because they run on software, doesn't that call into question whether we truly own any of our smart devices? Car companies certainly think so.

General Motors told the Copyright Office that the software in your vehicle is licensed to you. So it's GM who owns the vehicle through its entire life. If you like taking your car to your local repair shop for oil changes, this is bad news.

in the past, an oil change is as simple as, you know, pressing the gas pedal three times. Today, you're hooking up an extremely expensive piece of software Bob Lane owns this independent auto repair shop near Boston. He's seen firsthand how car manufacturers have used new tech advancements, not just to make cars more safe and more fun to drive, but to monopolize the repair market.

What I'll have to do is I will have to plug into the OBD connector along with my scanner. Bob's technician is using BMW's proprietary software to finish up an oil change on a 2023 model. I am now connected to the vehicle.

Each manufacturer has their own software, which mechanics need to figure out why your check engine light is on, and then to do the actual repair. Carmakers won't sell that software to mechanics, but they will license it through expensive temporary subscriptions. 24 hours can be 200, 250 dollars.

An annual fee could be 10,000 or 15,000 dollars, depending on the manufacturer. What we're really concerned about today is resetting the engine oil. When the technician tries to reset the level, nothing happens.

sure enough, it didn't do it. Even after subscribing to BMW's software, Bob's shop can't reset the oil light because BMW has put on a software lock that only the dealership can do it. We should be able to reset that light.

We're in the auto repair business. If you bring your car to me, I don't want to fix your car and get 80% of the way through a diagnosis and not have the information to complete that diagnosis the additional 20% and then I say, "I gotta send you to the dealer because we don't have the information. " Data restrictions cost independent repair shops around $3 billion each year.

Do you want to see your mom and dad's friend down the street who was fixing cars go out of business? Because that's what's going to happen. Companies also lock out local repair shops by aggressively getting design patents for the parts of a car that are most likely to be damaged in a collision.

So if you crash your Ford Fiesta and you need a new fender, if there's a design patent on that fender, the only place you're going to be able to get that part is from Ford. And Ford gets to charge whatever it wants to charge. These are all reasons why your car repair bill has shot up nearly 70% in the last decade.

Repair monopolies don't just cost us money, they also endanger our health. Like for people who use electric wheelchairs. I've got friends that spend almost a whole year in bed because they're waiting on repairs.

And having to wait for authorized repairs can leave hospitals without critical equipment for weeks. They don't want to give us tech support over the phone, they don't want to sell us parts, and they don't want to give us any technical literature. For farmers and ranchers like Walter, repair monopolies exacerbate the pressures of a high stakes job.

Farmers and ranchers, we have the highest suicide rate in the nation. And it's because our occupation is so stressful. Equipment breaking down and you are not able to fix it?

You can't do anything? That's a whole new level of stress. So how can we break up these repair monopolies?

Well, three ways. The first is to enforce our existing antitrust laws. Farmers have filed multiple class action lawsuits against John Deere, saying their repair monopoly violates the Sherman Act.

The Justice Department says they support the farmers. And the Federal Trade Commission has been investigating John Deere's repair monopoly since 2021. The FTC has already broken up repair monopolies from Harley Davidson, Weber, and Westinghouse.

So they can't void your warranty anymore if you use your local repair shop or do the repairs yourself. The FTC also got us our McFlurries back. Along with other repair advocates, they got the Copyright Office to grant an exemption to the DMCA, so that third party repair can circumvent the digital locks on the ice cream machines to make the necessary repairs.

And that's the second way to break up repair monopolies: updating our outdated copyright laws. The Freedom to Repair Act would permanently amend the DMCA so we can jailbreak all our machines and devices, as long as it's for repair. But the most important thing we can do is pass right to repair laws and force companies to sell products that are easier to repair without going through the manufacturer.

Laws like this are currently working their way through 30 statehouses. The Right to Repair movement is gaining more traction. This is about competition.

I bought it, but I'm kind of a slave to your operation. Is it more cost efficient to have it fixed or to have it replaced? You can do a charge port repair for 15.

15 dollars? Yeah! Wow.

Okay. Still, the legal battle has been tough. On one side, you have farmers, local repair shops, disability rights advocates, DIY fixers, and zero waste advocates.

On the other side, a group of companies worth over $10 trillion. And with all that money and lobbying, the fight has gotten pretty dirty. Microsoft was going around telling their, our members in the legislature they weren't going to sell their Surface tablets in Washington any longer if we passed the bill the way it was.

To see that tug of war in action, let's see how it's playing out in the auto industry, where the fight over Right to Repair started nearly 30 years ago. Why should only some people be able to obtain repair information while others do not have access to it? Over the next decade, Congress considered several federal Right to Repair bills for cars, but automakers lobbied fiercely, and none passed.

We just don't think there's a problem. until 2012. Massachusetts passed the nation's first Right to Repair law for cars.

Very excited, very static. Automakers agreed to obey the state law across the country to avoid more costly battles. But their lobbying did get them a loophole.

The law didn't require car manufacturers to share any repair data that was transmitted wirelessly. Which today is how most new cars do it. And when Massachusetts tried to close the loophole in 2020, car companies spent $25 million trying to defeat the bill.

They ran ads like this one, showing a woman being stalked in a parking garage at night. The message? Right to Repair laws will give criminals access to your car's data.

That's a wild argument to make, so let's take a closer look at it. New cars are like smartphones on wheels. They're collecting really sensitive data about how we look, where we go, and how fast we get there.

And car companies use that data to infer even more intimate stuff about us, like our genetic information and sexual activity. That's creepy. Wish they wouldn't do that at all.

But they're saying that sharing repair data with mechanics would also compromise all this other vehicle data. But the Mozilla Foundation found that car companies are already exposing our information, with data breaches caused by their own mistakes, not because of Right to Repair. And here's the key part.

Having exclusive access to all our vehicle data is really valuable. That's why automakers are fighting right to repair laws this viciously. They want data monopolies.

According to a New York Times investigation, car companies take that data on your driving behavior, like how often you're braking too hard or speeding, and they sell it to data brokers who then sell it to insurance companies, who then use it to jack up your insurance rate. Wanting to maintain a data monopoly may also be why John Deere has spent millions of dollars lobbying against Right to Repair bills. This precision ag equipment that you're using is uploading data to the cloud.

So are you planting corn? Are you planting soybeans? Are you planting wheat?

These equipment manufacturers are harvesting real time data of the condition of the crop, the quality of the crop, and the yields of those crops. Real time aggregate data about which crops are going to hit the market before they do. They could actually manipulate the market with it.

You know, they only have to know the information about what's actually happening with harvest minutes before somebody else knows it. Across the country, the fight over Right to Repair wages on. Still, these eight states have managed to pass a bill.

One of those is Massachusetts' updated auto repair law, which passed in 2020 with 75% of voters approving it. But automakers sued to block it, and the legal battle has kept it from being fully enforced. The most comprehensive law is Minnesota's.

It grants the right to repair for consumer electronics and home appliances, but it leaves out farm equipment and wheelchairs. Colorado's law does cover farm equipment and wheelchairs. And it, along with Oregon, also makes parts pairing illegal.

So manufacturers can't use software to stop you or a local repair shop from installing replacement parts. But a patchwork of state laws isn't enough. We need comprehensive federal Right to Repair laws, like the Fair Repair Act, which would remove software locks and other repair restrictions from your phone, laptop and other devices.

Lawmakers have also introduced federal Right to Repair bills specifically for cars and for farm equipment. it's kind of therapeutic to take on a problem and fix that problem yourself. And that has been taken away from me.

This is about 30 years old. It has around 12,000 hours on it. Walter bought this older John Deere tractor secondhand so that when it broke down he could troubleshoot it with his local mechanic.

Pull it back three times. And then to the right twice. And then read the error code.

With the error codes, Walter and his mechanic could figure out what part he needed to replace, which he found on eBay. And this was an official John Deere part that you bought on eBay. That's right, on eBay.

Walter installed the new part himself and was back up and running within a day, No software, didn't have to reprogram the part. And the final repair bill? About 90 bucks.

And I was able to do it myself. Thanks for watching The Classroom. We're always looking to tell more stories like this one, unpacking the economic systems that impact all of our daily lives.

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