romaine: bloomberg world headquarters in new york, i romaine bostick. taylor: i'm taylor riggs. joe: and i'm sonali basak. caroline hyde is off today. romaine: since the first electronic goods have emerged in the 1950's, buyers kept them going by repairing them, certain parts themselves. there was a whole subset of an economy centered around this

idea. remember radioshack? nowadays, try to repair these things on your own, it is now a costly and cumbersome, if not a completely impossible endeavor. it avoids warranties, violates user agreements, and may even land you in court. the hurdles that manufacturers have set up has stoped a lot of frustration and now, there is demand from consumers for the right to repair what they bought and supposedly what they own. companies argue allowing anyone unfettered access to the innards of their machine and the computer code would expose industry siege ritz and put the safety and security and security of customers themselves at risk. two accountants turned entrepreneurs, one at mcdonald's and thousands of ice cream machines that always seem to be out of order. a company be called kitsch would

alert owners about a breakdown. but it bypassed a proprietary software code to diagnose the problem themselves. it's a simple enough concept that has led to a more complex legal battle over ownership and usage rights. this likely lead to the federal trade commission unanimously approving new policy for right to repair. germany o'sullivan joins us now to talk more about this issue. jeremy, i want to start off with the basic question here about the ownership of something like those ice cream machines here. the idea is that someone takes possession of those machines, the franchisee, they would seem to want to have the right or the ability to fix things or be able to diagnose things. why would they not have had the ability to do that? jeremy: that's a great question. clearly, the agreements in place between the franchise owners, who own these machines, and

taylor, the company that sells the machines, as well as services the machines, all of the documentation that they had at the time of sale would indicate that they actually own these machines, they own the data on these machines, and it's really interesting about this particular case. there are no other agreements going on. if you look at apple or john deere, when you buy a tractor or iphone, there is a terms of service, an end user license agreement. these companies specify all those things, but taylor in the nick donald ice cream machines, that stuff is not there. it's decades behind. there's been a lot of your responsibility and probably incompetency going on here, and the franchisees are the ones that have to pay. taylor: it's really interesting. we have been reading a lot about

this in preparation for the interview, and i think there is a lot of interesting questions here, between what is the right to repair versus what is intentionally broken? how do you distinguish between the two when you think about what people might want as a basic right to repair? jeremy: that's a great question. on one end of the spectrum, you have the right to repair the products you like that happen to break. as you have with apple. people love apples products. clearly, they are upset when they get broken and want to fix them. on the other end of the spectrum, you have what's going on with the mcdonald's ice cream machines. you have a product that is intentionally broken that would have otherwise worked if it wasn't programmed to do so. so to me, there is a very big

distinction between companies that are putting pressure on consumers, like apple and john deere, and then there are companies that are being purely a responsible and not making the adequate disclosures that i think the ftc, it's going to be a gold mine of misdeeds for them to look at. romaine: there is a distinction between those, too. what stops apple from going down that path? not to imply that apple is due the -- doing dac, but if you bought an apple computer and they -- late 1970's or early 80's, it came with a repair manual. you could actually unscrew that thing and fix it yourself and do so with an apple manual by your side. they don't want you doing that now i don't -- have a good case as to why they don't want to, but what's to stop other companies from going down the road of taylor, being more

aggressive about preventing the owners of their devices from doing anything with them without their permission? jeremy: that's really where we need a serious look at right to repair actions. i think the case with apple, apple is ultimately accountable to its consumers. it's a consumer brand. people love its products. with taylor, the majority of taylor's global franchise customers don't wittingly or opt for a taylor machine. they are compelled to buy it by their franchise agreement. so it's about having that connection with your customer, being accountable to your customer, and in the case of taylor and middle be, they are parents. they are insulated by these cushy relationships they have

with their franchise office. the mcdonald's headquarters in chicago. as long as taylors keeps mcdonald's in chicago happy, they can keep all of the franchisees across the globe under duress with terrible machines they make. sonali: announcements, today, a wall street journal article talking about the ftc starting to investigate some of this. is this an improvement, a step in the right direction that you see, from your opinion? >> yeah, absolutely. this is a really interesting story, because this thing was born on the internet, you know? this started when people clearly loved mcdonald's, there ice cream, they were upset when they couldn't get it. they turned to the only place they could turn to, which was twitter. the whole time, mcdonald's and taylor are saying, there is nothing to see here, and people were saying no, this machine is

notoriously broken. it's so broken that there's not even a comparison for it. the fact that the internet would not let go of this, the fact that it became a meme, the fact that, you know, it was the data plus our own data that we created, we became the only person in the world to run taylor machines remotely at places like levi stadium or tesla in the bay area. it's inspiring to see this story go from nothing to being an issue that the biden administration is taking very seriously. sonali: you made a strong statement very earlier, and you said the ftc could find a minefield of misdeeds. what's at stake for consumers, for society more largely -- what do you think they will find? jeremy: oh, let me back up and

say, we look forward to working with the ftc. we likely have the largest data set on earth for this particular data, and it's very damming stuff. there are numerous issues with, the ftc would have with the data we have collected, from timing products to making false statements, not making proper disclosures, potentially fraud by concealment here. taylor has potentially collected over $1 billion in repairs for repairs that were, at least in part, simulated or caused by their own software, whether

their bugs were done by incompetency or intentionally. this is a gold mine for the ftc to look at, and we are excited to work with them. romaine: jeremy o'sullivan, cofounder and ceo of a company called kytch, which has gotten a lot of fame here for the way it allowed some mcdonald's franchisees to bypass the codes on these taylor ice cream machines, made by a company called taylor commercial. the company has actually responded with regards to the lawsuit and said they are not infringing anything with regards to right to repair. they were also quoted in the most recent wall street journal story, saying they have done nothing wrong and there is a big misunderstanding as to how people perceive their racine -- there machines. we will continue with this topic , because it goes beyond taylor and mcdonald's, to a lot of other products. we will speak with the u.s. policy lead, an intellectual

property lawyer joining us to talk about policy and the potential expansion of confusion right -- consumer right to repair. this is bloomberg. ♪

sonali: some could say this is a win for consumers. the ftc is zeroing in on the right to repair. last month, the organization voted to approve a new policy to prioritize enforcement against manufacturers that make it difficult for consumers to fix products on their own. more than 20 states are weighing legislation to give consumers more rights to resell, repair, and modify the product that they buy. carry she hand is the u.s.

policy lead for ifixit as a lawyer with a background in intellectual property law. she joins us now. give us an overview now of the actions the ftc has taken and where you think this could go. >> absolutely. a few years ago, the ftc started with a workshop, where they solicited feedback from people in the repair industry and the aftermarket, manufacturers with what was going on with repair prescriptions -- repair restrictions in the market. just this year in may, the ftc released a report based on that workshop, which went through all of the arguments in favor of and against right to repair. all the manufacturers justifications, and what the ftc concluded to address that. the report has been a fantastic, blockbuster, unanimous report from the ftc that found the manufacturer argument don't

carry water and were not backed by evidence. that was a strong endorsement of what the right to repair movement has been pushing for, which is the right and the ability for everyone to fix their own products or take them to an independent repair shop of their choosing. the ftc has offered a unanimous policy statement in july, prioritizing enforcement against manufacturers who use repair restrictions and anticompetitive ways or who unlawfully avoid consumer warrantees because someone has tried to fix the device themselves or gotten it fixed at an independent provider. we are encouraged by this, as well as the ftc using its authority, as to when they might be violating the law as anti-competitive acts. romaine: we've heard from big

companies like apple and smaller companies, and even to an extent, car companies, saying there is a lot of pride terry information here. we want to protect that from competitors and make sure that if you start messing around, you don't mess up the product in a way that is harmful to you or the product in some way here. there is a law, or a regulation of some sort, that governs that, that a lot of these companies .2, right? >> there is an act that prohibits companies from voiding your warranty because you used independent repair. there is also an automobile right to repair law in massachusetts that passed in 2012 for members of the commonwealth. that required manufacturers to open up and provide parts and information and tools to independent repair technicians and car owners themselves. a subsequent law was passed in massachusetts that requires them

to provide access to wireless data systems being used to communicate car diagnostic information. in terms of argument the manufacturers have made, independent repair is going to be dangerous or unsafe, the ftc looks at those arguments and found that there wasn't any evidence that independent repair is any less safe than a manufacturer branded repair service. those arguments don't really carry any water. in terms of whether this will just -- include disclosure of proprietary information, it would not did -- require disclosure of any trade secrets, all it requires is that manufacturers let people get access to the parts, the tools, and the service information they need to repair their devices. in many cases, they are already providing information's to networks of branded report --

repair technicians. if they are going to trust a 19-year-old with this information, they shouldn't trust your independent, local mechanic with taylor: this information as well. taylor:an article was published that if the ftc looked around, too many companies have put up artificial blocks against repairs. how steep is this uphill battle for them? how long will it take? what does the road ahead look like? >> great question. i can't speak to how long the ftc will taken any of its investigations, but evidence abounds that there are companies using these repair restrictions in ways that are anticompetitive or to deceive consumers. i don't think it will be hard to find that evidence. we certainly pointed to a lot of it over at our company, everything from companies gluing batteries into using restrictive software tools to inhibit repair.

the ftc, it will not be that much of an uphill climb for them. romaine: and then it gets to the big conspiracy theory that has been out there for sometime about planned obsolescence. when it comes to cell phone manufacturers, computer companies. the idea that this is all part of the game here. you build these things to break down at a certain amount of time, you can't fix them, so you have no choice but to go in and get the latest iphone 22. >> i can't speak to internal motivations for these companies, but planned obsolescence is a big problem. e-waste is a huge contributor to environmental problems. it has a huge carbon impact and we often see, even when a manufacturers authorized repair services, like apple, for example, they artificially limit the amount of repairs they can do and encourage you to buy a newer device.

there was a great article that joanna stern published this week , talking about her experience taking two broken laptops to the apple genius bar, and finding that an independent purveyor -- repair provider could do repairs for much less. we have also see unit then turn people away, same repairs can't be done, when a and independent repair provider is capable of doing these things. romaine: we will have to leave it there. carry she hand, thank you so much. more on this topic just ahead. this is bloomberg. ♪

♪ taylor: today, we've been really focused on the right to repair movement. president biden's antitrust push will make it easier for owners to fix products, indirectly

targeting a contentious area of copyright law. kyle, how is poppy wright folded into all of this? -- copyright folded into all of this? >> it's a bit of an accident. the 1998 copyright law has an action aimed at preventing piracy. it is illegal to circumvent anything designed to protect copyrighted material. that means that if you had a cdu or cassette, it is designed to be in casa to copy, you are not supposed to even try to circumvent it. the problem there, once you start talking about software, software as indicated in this right to repair issue. romaine: that's what i don't understand. a cd or movie makes sense to me, that's real intellectual property that a consumer can put their head around with regards

to taking that and doing something with it they shouldn't. but just going into a car or going into an iphone and changing a couple of things around for your own personal use, where's the violation? is that really a violation? >> a lot of advocates on the copyright side of things want there to be a provision in there that says there has to be annexes to copyright infringement p -- a nexus to copyright infringement. if it is to stop you from getting access to copyright material, including software, you have a violation of sorts. they also have some exemptions. every three years, the copyright office advises the librarian of congress, who puts out a list of exceptions where you are allowed to circumvent things for a wide variety of purposes. some of them include vehicle repair and then there are

others, like testing security, testing software security systems and other areas where you want access for a reason other than infringement. they still have to petition every three years to keep the exemption in place, and if it falls off the list, it falls off the list. romaine: a complex subject that regular people like us are trying to figure out. kyle, thank you for your time. we want to thank all three of our guest today, a real interesting conversation today. it boils down to what you really own anymore? we have been moving in our society towards this really weird business model where you buy something, but you don't really own it. taylor: we all just have to brush up on our legal skills. that's my take away from this conversation with everyone who is smarter than we are. sonali: and a hurdle for the bind administration, it looks like. taylor: yep. romaine: this is so complex.

i grew up fixing my own car and now -- taylor: here's the good news. we get jobs out tomorrow at 8:30 a.m. those are the only things the market will want to know. sonali: we will be right here to find out. this is bloomberg. ♪

>> from the heart innovation, money, and power collide, in silicon valley and beyond, this is "bloomberg technology." with emily chang. emily: i'm emily chang in san francisco. this is "bloomberg technology." bitcoin soaring past $50,000 yet again, flirting with a prolonged rally. el salvador is poisedar