John Deere Class Action Lawsuit
Class Action Attorney investigating claims that John Deere has unfairly monopolized the market for machinery repair, allowing the company to charge exorbitant prices to farmers to have machinery software repaired.
UPDATE: On behalf of a class of plaintiffs, The Lyon Firm has filed an antitrust complaint against John Deere. See complaint details below:
According to new lawsuits filed, the agricultural machinery company, John Deere, has made it nearly impossible for farmers to get farm equipment repaired by anyone but John Deere.
The John Deere class action antitrust lawsuit was filed in Illinois federal court, alleging the company has unfairly monopolized the equipment repair market, sending prices through the roof.
The class action lawsuit alleges that, like Apple with smartphones, John Deere is withholding specific software tools needed to repair its machinery. The complaint claims Deere’s integration of onboard computers known as engine control units prevents independent mechanics from properly servicing Deere products, forcing John Deere customers to rely on the company for critical maintenance.
John Deere, the largest single player in the American agricultural machinery market, has rolled out increasingly advanced technology into its equipment, and the company’s tractors now require proprietary software and associated tools in order to be repaired.
John Deere tractor owners are still able to replace the transmission on their machines, but the tractor will not operate unless the software “approves” the newly installed part, according to the official complaint. So even if a farmer or mechanic has the necessary parts for repair, a lack of access to the company software will leave a tractor unable to function properly. Thus, farmers must call the dealership to repair.
According to the John Deere lawsuit, many customers with tractor software issues have to simply wait for a John Deere technician to fix the problem.
John Deere has stated that farmers have a right to repair their own tractors, but in some cases farmers and independent repair shops are unable due to the sophisticated software. The lawsuit alleges John Deere made a pledge to release tractor repair software and tools available by January 2021, but has not done so.
According to the lawsuit, John Deere and its dealerships are motivated to minimize equipment repair competition because maintenance and repairs are so profitable for the company.
John Deere Repair Lawsuit
Plaintiff claim John Deere is exploiting its relationship with customers by tying the purchase of a very expensive machine to the purchase of the company’s repair services. John Deere’s alleged prevention of independent repairs creates a good deal of after-market revenue.
The class action Deere lawsuit seeks to cover all customers who purchased repair services from John Deere and Deere dealerships from January 12, 2018 through the present. The lawsuit alleges John Deere has violated the federal Sherman Act.
Attorneys say farmers have traditionally had the ability to repair and maintain their own tractors, or else hire independent mechanics. But with the newer generations of John Deere agricultural equipment, the company has made this extremely difficult.
Now the end customers are not provided with access to the software and repair tools that the dealerships have. As a result, private farmers have paid millions for services they should be able to do themselves.
With new Deere machines, minor damage to equipment with a Deere ECU installed may trigger a damage response in the system, shutting the equipment down until it is serviced. A problem with any of the installed controller networks requires diagnostic tools not available to farmers, sending them to the dealer for a repair, delaying work and adding to costs.
The Deere class action aims to stop Deere’s alleged repair monopoly, and reimburse customers for overpriced maintenance.
John Deere Responds to Pressing Litigation
After feeling legal pressure, John Deere announced it will expand access to self-repair resources starting in May 2022.
The John Deere Customer Service Advisor will now be available for customers and independent repair shops to purchase directly through the company’s website. Customer Service Advisor, a digital database of operator, diagnostic, and technical manuals, had previously only been available through certified dealerships. The critical service allows users to “connect to machines to clear and refresh codes, take diagnostic readings, and perform limited calibrations.”
Owners of John Deere equipment can still visit a dealership if they want, or choose to repair on their own and work with an independent repair shop.
The Lyon Firm Files John Deere Antitrust Lawsuit
Because there are few viable players in the game, John Deere wields significant economic power in the agricultural and industrial heavy equipment market. Attorneys well-versed in antitrust law urge the company to self-regulate and tread lightly on American consumers, so as not to operate illegally, curtail fair competition and destroy the bottom line of so many small businesses.
In recent years, John Deere equipment has been manufactured with complex onboard computers known as ECUs. The ECU requires proprietary software and associated repair tools to perform or complete both routine and complex repair work. Because Deere has allegedly monopolized the repair service market for their own brand, plaintiffs have taken legal action.
What has changed from years past? Besides the technology itself, John Deere has changed the way it does business with farmers and other businesses. Deere Tractor owners, for example, have traditionally had the ability to repair their own Deere Tractors as needed, or have had the option to have an independent mechanic service their machines. But that is no longer possible with the newer ECU Software.
Owners and mechanics may still have the necessary mechanical parts, knowledge, and the skill to make repairs, but without access to the ECU Software, the repair is not recognized by the on-board computer system, making the repair ineffective.
Thus, equipment owners have no choice but to hire Deere Repair Services at extremely high prices for services and repairs. John Deere, of course, is restricting access to the ECU Software for this very reason: to drum up more business and profit. Repair services are up to six times more profitable than its sales of original equipment. The company is highly motivated to prevent competition from independent repair shops, but that may constitute an antitrust violation.
Deere continues to exploit its business relationship with customers who have purchased very expensive Tractors, and have allegedly created an effective tying arrangement, whereby the purchase of Deere Repair Services is tied to the initial purchase of Deere Tractors.
John Deere promised in 2018 to make the necessary equipment software available by January 2021, but Deere has failed to follow through on this promise. Now antitrust attorneys allege Deere unlawfully stifles competition by blocking independent repair shops and reducing consumer choice in what would otherwise be a robust and competitive repair aftermarket.
The complaint filed by The Lyon Firm alleges that John Deere has violated Section 1 of the Sherman Act by forcing consolidation of its affiliated Dealerships to eliminate inter-brand competition for Repair Services. Deere also violated Section 1 of the Sherman Act through its arrangements with Co-conspirator Dealerships to not sell the Software to farmers and independent repair shops.
Finally, Deere violated Section 1 of the Sherman Act through forcing customers to purchase Deere Repair Services from Deere once they were locked into ownership of an expensive Deere Tractor. Deere’s tying arrangement between Deere Tractors and Repair Services had both the intent and effect of harming competition and creating a monopoly.
In summary, John Deere’s anti-competitive conduct has had the following effects on customers:
- Price competition on repair services has been restrained or eliminated;
- The prices of Deere Repair Services have been fixed, raised, stabilized, or maintained at artificially inflated levels;
- Purchasers of John Deere Repair Services have been deprived of free and open competition.