A proposed class action alleges John Deere has deliberately monopolized the repair service market for its brand of agricultural equipment by making critical software and tools inaccessible to farmers and independent repair shops.
The 48-page antitrust case also alleges Deere & Co.’s highly consolidated independent dealership network is not permitted through their agreements with the defendant to allow farmers or repair shops to access the same software and tools that they have. According to the complaint, John Deere and its authorized dealerships have “cornered” the repair services market in the United States to the tune of “supracompetitive” profits, and created a logistical nightmare for many farmers left “at the mercy of a dealer’s schedule” and prices.
“Consequently, Plaintiff and Class members have paid millions of dollars more for repair services than they would have paid in a competitive market,” the case contests.
Moline, Illinois-based John Deere, the largest player in the agricultural machinery market in the U.S., has implemented increasingly advanced technology into its products in recent years, as the company’s tractors over the last two decades have come to require proprietary software and associated tools in order to be repaired, the lawsuit begins. More specifically, a tractor’s engine control unit determines how, and if, a John Deere tractor functions, and owners/operators are essentially beholden to the large number of sensors each tractor uses to monitor for potential errors, according to the case.
Although a John Deere tractor owner may be able to replace the transmission on their equipment, the tractor will not operate unless the software “approves” the newly installed part, the complaint says. The case contends that even if a farmer or mechanic has the necessary parts, knowledge and skill to repair a John Deere product, their lack of access to the defendant’s software will cause any repair to be ineffective, and leave a tractor unable to function properly.
“Even if the farmer is able to interpret the error code and determine what the problem is with the Tractor, it doesn’t matter how tech-savvy or experienced a mechanic a farmer is; without access to the necessary software and tools, farmers must call the dealership to repair, or clear fault codes for, their machine.”
According to the suit, many farmers who’ve been hampered by tractor software issues have no choice but to sit and wait for a John Deere technician to arrive, losing valuable time and leading to expensive crop losses.
As the suit tells it, John Deere has on the one hand demonstrated that it knows that farmers have a right to repair their own tractors, while at the same time “misleading the public” with regard to how easy repairs are for farmers and independent repair shops. The lawsuit alleges that John Deere has failed tofollow through on a 2018 promiseto make necessary tractor repair software and tools available by January 2021.
According to the lawsuit, John Deere has deliberately blocked farmers and independent repair shops from accessing software essential to the functionality of its tractors, and allows only authorized Deere dealerships and technicians to access, but not sell, the software. The case argues that John Deere and its dealerships are “highly motivated” to keep repair competition to a minimum given the defendant’s repair services business is “three to six times more profitable than its sale of original equipment.”
The plaintiff, a North Dakota farming company who owns five John Deere tractors and two John Deere combines, claims John Deere’s exploitation of its relationship with customers amounts to a “tying arrangement” whereby an initial purchase of an “extremely expensive” tractor is linked to the purchase of the company’s repair services.
“The motive behind restricting access to the Software is simple: Deere and its Dealerships did not want their revenue stream from service and repair—a far more lucrative business than original equipment sales—to end when the equipment is purchased, as it often did in the past when owners could perform their own repairs or rely on individual repair shops,” the lawsuit says. “Deere’s scheme to prevent independent repairs creates additional revenue for Deere over the entire useful life of every piece of equipment it sells.”
The lawsuit looks to cover all persons and entities who purchased repair services from John Deere and Deere-affiliated independent dealerships and technicians for Deere-brand agricultural equipment from January 12, 2018 through the present. The suit alleges John Deere has run afoul of Sections 1 and 2 of the federalSherman Act.
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