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Apple’s Independent Repair Program Is Invasive to Shops and Their Customers, Contract Shows

The contract states independent repair shops must agree to audits and inspections by Apple, even if they leave the program.
February 6, 2020, 1:00pm

Last August, in what was widely hailed a victory for the right-to-repair movement, Apple announced it would begin selling parts, tools, and diagnostic services to independent repair shops in addition to its “authorized” repair partners. Apple’s so-called Independent Repair Provider (IRP) program had its limitations, but was still seen as a step forward for a company that’s fought independent repair for years.

Recently, Motherboard obtained a copy of the contract businesses are required to sign before being admitted to Apple’s IRP Program. The contract, which has not previously been made public, sheds new light on a program Apple initially touted as increasing access to repair but has been remarkably silent on ever since. It contains terms that lawyers and repair advocates described as “onerous” and “crazy”; terms that could give Apple significant control over businesses that choose to participate. Concerningly, the contract is also invasive from a consumer privacy standpoint.

In order to join the program, the contract states independent repair shops must agree to unannounced audits and inspections by Apple, which are intended, at least in part, to search for and identify the use of "prohibited" repair parts, which Apple can impose fines for. If they leave the program, Apple reserves the right to continue inspecting repair shops for up to five years after a repair shop leaves the program. Apple also requires repair shops in the program to share information about their customers at Apple’s request, including names, phone numbers, and home addresses.

According to multiple individuals with knowledge of the program, businesses receive this contract after signing a non-disclosure agreement with Apple.

The contract Motherboard reviewed makes clear that Apple does not want independent repair shops to be confused for Apple Authorized Service Providers, businesses that have received certification from Apple and are allowed to conduct a limited number of repairs with access to Apple parts and diagnostic tools. While businesses that wish to join the IRP Program must be “Apple certified” too, they are required to display a “prominent and easily visible written notice,” both on their storefront and website, informing customers that they are not Apple authorized. Furthermore, IRPs must obtain “express written acknowledgement” from customers showing they understand they are not receiving repairs from an authorized service provider, which, as Nathan Proctor, a right to repair advocate with the US Public Research Interest Group put it, “is like going to a normal repair shop except one that advertises against [itself] at every possible moment.”

The contract also states that repair businesses need to obtain written consent from their customers acknowledging that Apple won’t warranty the repair. In another section, Apple also disavows warranties “unless otherwise specified in the Independent Repair Provider Manual,” a separate document laying out the nuts and bolts of the program in more detail. In a copy of that manual shared with Motherboard, Apple indicates that it will allow businesses to return parts within 90 days if those parts are defective upon “first use out of the box.” Apple did not respond to a request for clarification on whether this includes parts only found to be defective after they are used in a repair.

While the contract raises questions about whether Apple will stand behind its own products when sold through independent repair shops, businesses involved in the program are also required to stay away from so-called “prohibited products.” According to the contract, these include “counterfeit Products or service parts,” as well as “products or service parts that infringe on Apple’s intellectual property.”

As Motherboard has previously and extensively reported, there is not a clear definition of what constitutes a "counterfeit" iPhone part, and Apple has previously worked with customs officials in multiple countries to seize products that independent repair professionals say should not have been considered counterfeit. Legal experts contacted for this story said Apple’s definition of intellectual property is equally murky.

“That is an ambiguous, subjective, and potentially very broad definition,” said Aaron Perzanowski, a law professor at Case Western Reserve University. “As a result, it gives Apple a lot of leverage over the companies that sign this agreement.”

That could include forcing businesses to hand their forbidden items over to Apple.

“If Independent Repair Provider learns or suspects that it has prohibited products in inventory,” the contract reads, “Independent Repair Provider will… notify Apple, remove prohibited product listings, and discontinue use and sales of the prohibited products.” Businesses that discover prohibited products in their inventory will also “assist Apple’s investigation of such prohibited products,” and “send prohibited products to Apple, at Independent Repair Provider’s expense, for secure destruction and recycling.”

The contract also grants Apple broad latitude to surveil repair businesses in order to ensure their compliance with its terms. Participating repair shops must allow Apple to audit their facilities “at any time,” including during normal business hours. According to the contract, Apple may continue conducting audits, which can involve interviewing the repair shop’s employees, for five years following termination of the contract.

These audits go beyond Apple dropping in on businesses to interrogate workers. The contract requires that IRPs “maintain an electronic service database and/or written documentation” of customer information to assist Apple in its investigations. According to the contract, that database must include the names, phone numbers, email addresses and physical addresses of customers, stipulations that gave Perzanowski “serious misgivings.” As he noted, “some consumers may prefer an independent repair shop, in part, to reduce the data Apple maintains about them.”

Apple can also impose severe penalties on repair businesses if its audits turn up anything amiss. If Apple determines that more than 2 percent of a repair business’s transactions involved “prohibited products,” it can, per the contract, force the business to pay Apple $1,000 for every transaction that occurred during the audit period, in addition to reimbursing Apple for the cost of its investigation.

Kit Walsh, a senior staff attorney at the Electronic Frontier Foundation who reviewed the contract for Motherboard, said these conditions struck her as “very onerous.”

“They give Apple a huge amount of discretion, impose potentially business-destroying costs and penalties on the repair shop, and require that they grant access to Apple without notice,” Walsh wrote in an email to Motherboard. Walsh added that Apple is “notorious” for interpreting its intellectual property rights very broadly, citing the time it sued Samsung over the rounded corners of several phone models as an example.

“If you sign this agreement,” Walsh continued, “then you repair non-Apple devices at your peril.”

“If I were a potential [IRP]—I'd have blown this off with the initial NDA,” said Gay Gordon-Byrne, the executive director of The Repair Association, when Motherboard shared sections of the contract with her. “None of this makes sense as a business.”

Proctor agreed. “I can’t believe anyone would sign this. This is crazy,” he added.

Pedro Ferrer, who owns CPR Phone Repair in North Macon, Georgia, told Motherboard that other shop owners he had spoken to decided not to join the program because of Apple's insistence on collecting data: "I have heard that many have opted out because it requires for all customer info go to Apple regardless if they got an OEM repair or not."

While several repair shops Motherboard spoke to said they would never join the program because of its onerous terms, others said that they simply valued the opportunity to get parts directly from the manufacturer. While the prices of those parts are likely to be higher than the refurbished or aftermarket parts these shops can buy through third-parties, Apple is at least offering independent repair businesses the same prices on parts and tools that it offers to its authorized service providers.

Justin Carroll, owner of FruitFixed, a series of independent repair shops in Virginia, told Motherboard that he sees the IRP Program as an "olive branch" from Apple.

Know anything more about Apple's Independent Repair Provider Program or its repair policies? We'd love to hear from you. Please reach out to Maddie Stone at maddiemstone@protonmail.com. She also has open Twitter DMs @themadstone.

"People like us are uniquely qualified to handle things that don’t make Apple any money. We can keep battery repairs out of Apple stores and hopefully make a little money too," he said, adding that he would happily allow Apple to audit his stores: "I don’t think that’s as bad or a massive negative. That’s something for me I would welcome because I know everything in our house we’re selling is fine and above board."

Motherboard reached out to Apple for this story with a detailed list of questions on the contract, including questions about prohibited products, audits, and customer data collection. While Apple declined to answer our specific questions on the record, it did not dispute the accuracy of any of the contractual terms we raised.

“We are committed to giving our customers more options and locations for safe and reliable repairs,” Apple told Motherboard in a statement. “Our new independent repair provider program is designed to give repair businesses of all sizes access to genuine parts, training and tools needed to perform the most common iPhone repairs. We are excited by the initial response and high level of interest. We are working closely with interested parties and we will update language in our materials to address their feedback."

Apple’s plan to launch a program that offers parts and diagnostic tools to independent repair shops was first reported by Motherboard nearly a year ago. The official roll-out of the IRP Program last fall marked a major milestone for the right-to-repair movement, whose advocates have long criticized Apple for its anti-repair stances, including only offering parts and tools to Apple authorized businesses, lobbying against right to repair laws that would require Apple to sell repair parts to the general public without these contractual conditions, and designing products in ways that render repairs difficult or impossible.

But even as the repair community cheered Apple’s move, some were skeptical of its intentions. Was Apple really trying to increase access to repair, or was this more of a PR stunt to help the company defuse criticism?

Several months on, one thing is clear: Apple’s decision to launch the IRP Program hasn’t stopped it, or the trade organizations that represent it, from fighting against right to repair legislation. If anything, manufacturers seem to be trotting out the program as evidence that they are already meeting repair advocates’ demands.

After the Federal Trade Commission held a workshop on restrictions to repair last July, it opened a public comment period on the topic. Among the comments the FTC received was a letter from Walter Alcorn of the Consumer Technology Association (CTA), a trade group that represents more than 2,200 companies, including Apple, and which opposes right-to-repair laws. In it, Alcorn points out that consumers already have a “wide range of choices for repair and refurbishment,” including Apple’s new IRP Program. Another letter written by a constellation of manufacturers’ groups that oppose right-to-repair laws including the CTA and CompTIA (which represents Apple, Samsung, and other tech giants) doesn’t mention Apple, but does point out that OEMs are “continu[ing] to make investments in their repair networks” and that these networks include “independent repair providers that have gone through the process of OEM affiliation.”

Apple itself appears to be using the IRP Program as a political cudgel, too.

The day after the program was announced, an email shared with Motherboard shows an lobbyist touting the news to Oregon representative Rob Nosse, who recently sponsored a statehouse right-to-repair bill, on behalf of Apple. More recently, when the House Judiciary Committee asked Apple whether its restrictions on third-party repair are an attempt to “elbow out competition and extend its monopoly into the market for repairs,” Apple responded that it is “continu[ing] to grow its base of third-party repair providers in the United States,” including through the IRP Program.

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But while Apple presents the IRP Program as its way of working with the independent repair community, the language in this initial contract, at least, makes the program seem like yet another means of control. Walsh noted that the one-sidedness of Apple’s terms are evident from the outset, when it defines its “agreement” with independent repair businesses to include any additional documents Apple chooses to release in the future.

“Like Darth Vader, they can alter the deal and you can only pray they don't alter it any further,” Walsh said.

Jason Koebler contributed reporting.