CHICAGO (CN) — John Deere is illegally monopolizing the U.S. tractor repair industry, according to a class action antitrust lawsuit filed in Chicago federal court on Wednesday.
The suit alleges that, much like Apple with smartphones, Deere is purposefully withholding the software tools needed to repair its products from farmers and independent repair shops.
Specifically, the complaint claims Deere's integration of onboard computers known as engine control units, or ECUs, into its equipment artificially prevents otherwise knowledgeable mechanics from properly servicing Deere products. This forces Deere customers to rely on the multibillion-dollar company for their maintenance needs.
"Farmers have traditionally had the ability to repair and maintain their own tractors as needed, or else have had the option to bring their tractors to an independent mechanic. However, in newer generations of its agricultural equipment, Deere has deliberately monopolized the market for repair and maintenance services of its agricultural equipment with ECUs... by making crucial software and repair tools inaccessible to farmers and independent repair shops," the lawsuit states. "Furthermore, Deere’s network of highly-consolidated independent dealerships... is not permitted through their agreements with Deere to provide farmers or repair shops with access to the same software and repair tools the dealerships have."
The suit's class representative is Forest River Farms, a farming corporation in North Dakota. Forest River Farms owns five Deere tractors and two Deere combines. Representatives of Forest River Farms declined to comment, but according to the suit it and other private farmers have paid millions in unnecessary fees for services they would be able to do themselves, or pay less for, were it not for the proprietary nature of the ECUs.
"Deere’s monopolization of the Deere repair services market allows Deere and the dealerships to charge and collect supracompetitive prices for its services every time a piece of equipment requires the software to diagnose or complete a repair," the suit claims. "Consequently, plaintiff and class members have paid millions of dollars more for the repair services than they would have paid in a competitive market."
Complicating the matter is that even minor damage to a piece of equipment with a Deere ECU installed in it can trigger a damage response in the system, shutting the equipment down until it can be serviced.
"Like cars, John Deere tractors use a large number of sensors throughout the equipment that are constantly monitored by the ECU. When a sensor notices an error, no matter how small or serious, it can put the machine into 'limp mode,' allowing farmers to move the machine slowly but not operate it fully... Troubleshooting Deere Tractors—e.g., interpreting the error codes—requires software that Deere refuses to make available to farmers," the complaint states.
According to a report from the U.S. Public Interest Research Group, Deere equipment can have up to 125 sensors. Tripping even one can put the equipment into limp mode.
"Our research shows just how much software is present in modern farming equipment, with as many as 125 software-connected sensors in a single combine harvester. Each sensor is connected to a controller network. A problem with any one of those controller networks will require diagnostic tools not available to farmers, sending them back to the dealer for a repair... The delays associated with dealer repair can have real impacts on a farmer’s crop and yield," the report states.
Though the suit is aimed solely at Deere, the practice of heavy equipment manufacturers using proprietary software technology is common throughout the industry.
"[ECUs] are all proprietary... you can't take a John Deere ECU and put it in a Caterpillar," a worker from the Canadian heavy equipment distributor Frontier Power Products said under condition of anonymity.
"It's across the board, it's not just John Deere," agreed Mike McCaffrey, co-owner of Channahon Tractor LLC in Channahon, Illinois. "They all have the same thing, they all have the diagnostic systems you have to buy... or you have to pay their mechanics."
While McCaffrey was aware of the lawsuit against Deere and said he was "staying neutral" in his opinion of it, he added that paying for large companies' proprietary software and services can cost up to several thousand dollars a year.
The class action, if successful, would not only stop Deere's allegedly monopolistic practices, but repay independent repair shops like McCaffrey's for having to abide by those alleged practices.
"It would be inequitable under unjust enrichment principles in the District of Columbia and each of the fifty states for Deere to be permitted to retain any of the overcharges for repair services derived from Deere’s unfair and unconscionable methods, acts, and trade practices alleged in this complaint... Deere should be compelled to disgorge in a common fund for the benefit of plaintiff and the class all unlawful or inequitable proceeds it received," the suit states.
Deere did not immediately return a request for comment.
Read the Top 8
Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.