Antitrust Law Daily Wrap Up, ANTITRUST NEWS: John Deere harmed farmers with high repair costs, FTC alleges, (Jan 16, 2025)

By Martin A. Steinberg, J.D.

Deere & Company allegedly drove up farming equipment repair costs and restricted farmers' ability to seek repairs necessary for planting and harvesting.

The FTC, joined by the Illinois and Minnesota Attorneys General, has sued agricultural equipment manufacturer Deere & Company (Deere) over its use of unfair monopoly practices, the agency announced. These practices have driven up equipment repair costs for farmers while depriving them of the ability to make timely repairs on critical farming equipment, including tractors. The complaint alleges that, for decades, Deere has limited the ability of farmers and independent repair providers to repair Deere equipment, forcing farmers to instead rely on Deere’s network of authorized dealers for necessary repairs. This unfair steering practice has allegedly boosted Deere’s multi-billion-dollar profits on agricultural equipment and parts, growing its parts business while burdening farmers with higher repair costs (FTC v. Deere & Co., No. 3:25-cv-50017 (N.D. Ill. Jan. 15, 2025)).

Background. Deere is the world’s leading agricultural equipment manufacturer, including large tractors and combine harvesters. Deere enjoys a dominant share of large tractors and combines sales in the U.S. Deere distributes its equipment and related parts through a network of authorized Deere dealers that promote and sell equipment and parts and provide repair services to farmers. Deere appoints dealers to act as its authorized dealers.

The FTC stated that farmers have long sought to repair their equipment or relied on local, independent repair shops for lower costs, better reliability, and faster repair times. However, with the increasing computerization of Deere’s equipment over the past few decades, farmers must now rely on Deere’s interactive software tool, Service ADVISOR, which Deere only makes available to its authorized dealers. An inferior repair tool, Customer Service ADVISOR, exists but cannot perform all repairs on Deere agriculture equipment. Deere also fails to provide the information necessary to develop a fully functional repair tool to generic repair tool developers, as equipment manufacturers in the automotive and trucking industries do.

Through its limited distribution of repair tools, Deere has been able to control and limit who can repair its agricultural equipment. This allows Deere to maintain a 100% market share and charge higher prices via its network of authorized dealers for all repairs that require the fully functional tool. Additionally, these restrictions generate additional profits through parts sales, as its authorized network of dealers almost always uses expensive Deere-branded parts instead of generic parts in their repairs.

Despite increasing public pressure to give farmers the right to repair their equipment, including state legislative action, Deere unlawfully withholds a fully functional repair tool from equipment owners. Deere’s restrictions deprive farmers of the use of their own repair labor, deny them access to their preferred repair service providers, prevent them from more reliably planting, spraying, or harvesting crops on a schedule that would allow them to maximize yield, and force them to spend more on repair and parts, the FTC’s complaint states.

Claims. The complaint was filed according to Section 13(b) of the FTC Act, Section 16 of the Clayton Act, the Illinois Antitrust Act, 740 ILCS 10/3(3), and the Minnesota Antitrust Law of 1971, Minn. Stat. Sections 325D.49 to 325D.66, to enter a permanent injunction and other equitable relief against Deere. Plaintiffs seek to prevent Deere’s unlawful conduct in adversely affecting commerce in violation of Section 5(a) of the FTC Act, Section 2 of the Sherman Act, the Illinois Antitrust Act, and the Minnesota Antitrust Law, Minn. Stat. Sections 325D.49 to 325D.66, and Minnesota Statutes Section 8.31.

Chair Lina M. Khan. Khan released a statement in support of the lawsuit. Over the past 50 years, the Commission has worked on repair restrictions, including favoring the anti-tying provision of the Magnuson Moss Warranty Act. While manufacturers previously threatened to void warranties if customers relied on repairs from a different company, firms today threaten to withhold the software tools entirely, depriving users of the code needed even to diagnose the problem. In recent years, the Commission has prioritized protecting Americans’ right to repair their products and ensuring that independent mechanics are not being unlawfully shut out from the market.

In May 2021, the Commission submitted a report to Congress entitled Nixing the Fix: An FTC Report to Congress on Repair Restrictions that expanded upon these findings, particularly emphasizing repair restrictions imposed by mobile phone and car manufacturers. In July 2021, the Commission voted unanimously to issue a policy statement that committed the agency to ramping up law enforcement against repair restrictions that prevent small businesses, workers, consumers, and government entities from fixing their own products.

In June 2022, the Commission charged motorcycle manufacturer Harley-Davidson, and generator maker Westinghouse with illegally restricting customers’ right to repair their purchased products. In July 2022, the Commission took similar action against grill maker Weber for imposing unlawful repair restrictions on consumers. In July 2024, Commission staff also sent letters to eight companies notifying them that their warranty practices may unlawfully hamper consumers’ right to repair purchased products.

Dissenting statement. Commissioner Andrew N. Ferguson issued a dissenting statement that Commissioner Melissa Holyoak joined. While he is glad the Commission is taking up the cause of the farmer and that the Antitrust Division has recently devoted substantial resources to promoting competition in agriculture, he dissented from filing the Complaint on three procedural grounds.

First, given the timing of this filing, the action appears to have been taken in haste to beat President Trump into office, lending to the suit the stench of partisan motivation. He cannot support Commission conduct that appears to result from brazen partisanship.

Second, the Democratic majority’s decision shortchanges an ongoing investigation. The repair market is highly complicated, comprised of a web of authorized dealers, independent repair shops, customers, and parts manufacturers. The Commission staff has worked diligently to understand the market, but to date, they do not have the evidence to file this Complaint with genuine confidence in the ultimate chance of success.

Third, filing the Complaint at this time was deeply imprudent. The parties are in active negotiations over a fix that, if successful, could provide meaningful relief to America’s farmers. He favored settling this litigation only if that settlement offered tangible benefits to America’s farmers. If the Commission and Deere cannot reach such a settlement, the courts would resolve the right to repair the question only after years of litigation.

Private suits. Six separate actions brought against Deere in four different judicial districts were consolidated in the Northern District of Illinois. The Judicial Panel on Multidistrict Litigation concluded that the actions involved common questions of fact and that centralization would serve the convenience of the parties and witnesses and promote the just and efficient conduct of the litigation. The actions shared factual issues arising from allegations that Deere monopolized the market for repair and maintenance services for Deere agricultural equipment equipped with engine control units by restricting access to necessary repair-related software and diagnostic tools. These actions asserted substantially identical claims under the Sherman Act and claims of unjust enrichment or promissory estoppel and sought identical relief. The litigation was assigned to the Honorable Iain D. Johnston of the Western Division, who had been presiding over five of the actions. The suits are pending.

The Case is No. 3:25-cv-50017.

Judge: Johnston, I.

Attorneys: Laura Hall for the FTC. Brian Matthew Yost, Illinois Attorney General's Office, for State of Illinois. Katherine Moerke, Office of the Minnesota Attorney General, for State of Minnesota. Ryan C. Thomas (Jones Day) for Deere & Co.

Companies: Deere & Co.

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