FTC and States Sue Deere Over Alleged Equipment Repair Restrictions

The U.S. Federal Trade Commission (FTC) and two states have filed a lawsuit against agricultural equipment manufacturer Deere & Company (Deere), alleging that the company's repair practices have driven up equipment repair costs for farmers and deprived them of the ability to make timely repairs on critical farming equipment. The complaint, filed in the U.S. District Court for the Northern District of Illinois, seeks to stop Deere's anticompetitive conduct and order the company to make its repair tools and resources available to farmers and independent repair providers.

The FTC's complaint alleges that Deere has unlawfully restricted farmers' and independent repair providers' access to repair tools and information, forcing them to rely on Deere's authorized dealers for necessary repairs. This practice has boosted Deere's multi-billion-dollar profits on agricultural equipment and parts, growing its repair parts business while burdening farmers with higher repair costs. The FTC's Chair, Lina M. Khan, stated that illegal repair restrictions can be devastating for farmers, who rely on affordable and timely repairs to harvest their crops and earn their income.

Deere has maintained a dominant market share position across the large agricultural equipment market and has made it difficult for farmers to repair their own equipment or turn to local, independent repair providers. The company's repair restrictions have allowed it to unlawfully acquire and maintain monopoly power in the market for certain repair services for Deere agricultural equipment. The FTC's complaint alleges that Deere's repair restrictions have allowed the company to reap additional profits through parts sales, as its authorized network of dealers almost always use expensive Deere-branded parts in their repairs in lieu of generic parts.



Deere has faced increasing public pressure and lawsuits over its repair policies, with farmers and independent repair shops alleging that the company's practices have driven up repair costs and prevented them from making timely repairs on their equipment. In 2023, Deere signed a memorandum of understanding with the American Farm Bureau Federation (AFBF) that was supposed to make its software, tools, and documentation available so that farmers and independent shops can make their own repairs. However, the FTC's lawsuit alleges that Deere's repair restrictions continue to 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 lawsuit seeks to stop Deere's anticompetitive conduct by ordering, among other remedies, that Deere make available to owners of Deere large tractors and combines, as well as independent repair providers, access to its fully functional Service ADVISOR repair tool and any other repair resources available to authorized dealers. The Commission vote to authorize staff to file for a permanent injunction and other equitable relief in the U.S. District Court for the Northern District of Illinois was 3-2, with Commissioners Melissa Holyoak and Andrew Ferguson dissenting.

The outcome of this lawsuit could have significant implications for Deere's stock price and market capitalization in the short and long term, as well as influence other companies in the agricultural equipment industry. If the FTC and states win the case, Deere could face substantial financial penalties, loss of market share, reputation damage, and potential changes in its business model. This could lead to a decrease in Deere's stock price and market capitalization. Additionally, the outcome of the lawsuit could encourage fair competition, increase transparency and accessibility, and potentially lead to industry-wide changes in repair policies, setting new standards for repair practices and accessibility to diagnostic tools and information.