PURCHASERS of agricultural machinery would benefit from more independent competition in servicing and repair markets, the Australian Competition and Consumer Commission (ACCC) has concluded in a detailed study of agricultural machinery markets in Australia.
The report, released today, looks at a range of competition and fair trading issues in markets for the direct sale of agricultural machinery, as well as for after-sales services, such as repairs.
It also makes a number of recommendations aimed at improving competition and access by purchasers to after-sales services.
The ACCC’s study involved consultation with agricultural machinery purchasers, manufacturers and the retailing and repair industry, including a survey of purchasers.
Modern tractors, harvesters and other agricultural machinery use complex computerised systems that involve embedded software and specific tools and parts.
While this technology has increased productivity, it has also meant that access to this software, tools and parts is needed to repair the machinery.
These are often held or controlled by manufacturers, limiting the ability of independent repairers to do the work.
The report finds that the restricted access to software tools, technical information, and service manuals and parts held by manufacturers is limiting competition in repair markets.
It also finds that warranties can limit competition by discouraging the use of independent repairers.
“Competition in after-sales markets would be improved if independent repairers had access to software, tools and parts on fair and reasonable commercial terms. This is an important issue that runs across a number of industries, both in Australia and overseas,” ACCC deputy chair Mick Keogh said.
The ACCC has recommended that agricultural machinery be considered for future inclusion in the motor vehicle service and repair information sharing scheme.
The report also recommends that agricultural machinery be included in any broader ‘right to repair’ scheme introduced in Australia.
In particular, the ACCC believes that future right to repair legislation could include requirements for manufacturers to: grant access to diagnostic software tools and parts to independent repairers on commercially reasonable terms; have a sufficient supply of parts readily available in Australia for a defined period from the date of the sale agreement; and provide purchasers with information about how long a certain software system will be supported.
Warranty, data rights
A key emerging issue in the report is the control over, and use of, data.
“Our survey findings indicate that many purchasers of agricultural machinery don’t understand the circumstances under which manufacturers can collect, share and use the data generated by their machines,” Mr Keogh said.
The ACCC also found that many warranties have significant limitations, including their short duration which can often be limited to one or two years.
“The survey we conducted showed that purchasers often don’t understand the terms of warranties when they buy agricultural machinery, which involves a significant investment,” he said.
The ACCC has therefore made recommendations about the information that manufacturers and dealers should provide to purchasers about warranties, dispute resolution, and issues such as data rights and use.
To support this, the ACCC will develop materials to assist purchasers to understand their business and consumer rights in relation to agricultural machinery.
The full report is available at ‘Agricultural machinery market study – final report’.
The ACCC has also published the results of the agricultural machinery market study purchaser survey, available at ‘Agricultural machinery: after-sales markets’.