This week, many people on social media made cracks about a Wall Street Journal story describing how the United States Federal Trade Commission is investigating why McDonald’s ice cream making machines are so often broken. They referenced the story as if it was the wackiest thing they’d ever heard and the fact that the federal government is concerning itself with such a trivial matter shows how backwards the country is. Well, that’s one hot take, but it’s also an uninformed one. This story is cause for McWorry. It could involve your own wallet and your ability to fully own, use and repair property for which you’ve paid a pretty penny.
Quite simply, it’s about the right to repair things you own. Remember that Bee Gees song, How do you Mend a Broken McFlurry? Taylor is the company that makes McFlurry machines. Taylor is embroiled in a legal fight over measures it uses to prevent restaurants from repairing the ice cream machines on their own.
A California judge issued a temporary restraining order against Taylor when it was accused of obtaining rival repair devices to acquire trade secrets. The allegation is that Taylor wants to stop competitive technology that threaten Taylor’s stranglehold on the repair field.
When a McFlurry machine breaks down, only a certified technician from Taylor is allowed to fix it, leading to long wait times for service calls. Those wait times have increased during the pandemic. Competing companies have swooped in, eager to repair the machines themselves for a tidy profit, since Taylor is overwhelmed with the job. But Taylor doesn’t want anyone else to repair its machines. It wants to keep that money to itself. A federal judge that produces a diagnostic tool that threatens Taylor’s monopoly on repairs.
Recognize that word “monopoly.” The reason the FTC wants to investigate the persistent “out of order” signs on McFlurry machines is because the government is concerned that Taylor could be illegally keeping other companies from competing. Taylor seeks to monopolize the repair market and the government is investigating to see if there are antitrust violations being committed that interfere with free enterprise.
The government does not want this problem to spread and for good reason. We may not be lucky enough to own our own McFlurry machine, but we own cars, tractors, cell phones and other devices that need repair. We’re familiar with warranties that say that if we take the devices to any third party businesses for repair, we violate the warranty. That doesn’t mean we can’t get the device repaired by anyone we want. It just means we may lose the warranty if we do. We might lose the right to reimbursement or coverage if we take the device elsewhere. It’s our choice. We can do what we like, but it may cost us.
But what if the restrictions went further? What if we were prevented from asking a third party to repair our broken device no matter what. What if we didn’t have the choice of taking the device elsewhere to get it fixed and we were legally barred from repairing it ourselves, even if we’re handy with tools. What then?
The issue was notoriously raised in the John Deere tractor case. A lobbying group signed an agreement that caused California farmers to lose the right to purchase repair parts without going through a dealer. They could no longer head to a junk yard and find an old, inexpensive part to use as a replacement in their broken tractor. They had to buy from the dealer. They could not modify the software or hardware that ran their tractors. They couldn’t change engine settings themselves, couldn’t install new features, and couldn’t modify the tractors to meet changing environmental requirements themselves. They had to take the tractors to the dealer to do all of these things. Farmers pay more than six figures for some of these tractors. Yet, they were limited in how they could maintain them. They argued that if they purchased the property, they should be able to repair it any way they wanted. They shouldn’t have to go through the dealer. If they were restricted in their repair options, did they really own the $300,000 tractor at all? What did “ownership” even mean any more?
I’ve seen the same restrictions in other settings. I once purchased cabinetry outright. I paid for all of it at once. The large cabinet was assembled in my den, where it stood until it was time for me to move. That’s when I discovered that it had to be disassembled to get it out of the house. But I learned it wasn’t held together by regular nuts and bolts. The structure was joined by proprietary lock screws. You needed a unique tool to unscrew them and only the cabinet company had that tool. They didn’t sell it. When I called them, there was a long waitlist for them to send someone to my home to take the cabinet apart. It would take weeks for them to fit me in and I was moving that weekend.
Furthermore, having the cabinet company disassemble it would cost me $300. Only that company could put the cabinet back together and that would cost money too. Finally, because I couldn’t wait for the cabinet company to do the job, I had to let a handy man destroy part of the cabinet frame to move it. Then, at my new home, I stuck it back together with common nails, glue, spit and prayers. My $3000 cabinet was ruined.
Our loss of the right to repair is akin to the latter day mobster who made small business owners pay them for the right to do business in certain neighborhoods. If you wanted to run a laundry mat on Main Street, you would have to pay Big Louie for the privilege. The FTC does not want Taylor or John Deere to play the role of Big Louie. In July, the Biden Administration announced plans to allow equipment owners to have the right to repair their own equipment. President Biden then signed a widespread executive order promoting the right to competition and encouraging the FTC to limit the ability of manufacturers to restrict equipment owners from using independent repair shops or completing work on their devices themselves.
If you don’t want Ford Motor Company to stop you from taking your F150 to the corner mechanic for repair, then you shouldn’t want Taylor to stop McDonald’s from having any company it chooses repair the McFlurry machine. There is nothing frivolous about the FTC’s involvement in such safeguards that benefit both the economy and the consumer.
For some reason, the public is amused by any litigation involving McDonald’s, without ever grasping its true meaning. In 1992, when a woman sued McDonald’s because she was burned by hot coffee that spilled from her coffee cup, the world scoffed at the nearly $3 million the jury awarded her. They thought the jurists had gone crazy, needlessly rewarding the litigious, ignoring the fact that McDonald’s had received many previous warnings about serving coffee at scalding temperatures. In truth, the payment McDonald’s made totaled only approximately 2 days of coffee sales. It wasn’t meant to lavish a windfall on the woman who sued, but to punish McDonald’s for dangerous practices.
This time, McDonald’s is innocent, more victim than culprit. When customers go without McFlurries, McDonald’s goes without profit. If they could bring in companies other than Taylor to fix the machines, they could get them up and running faster — and probably for less money than Taylor charges for doing so.
For its part, McDonald’s seems flattered by the attention. In a statement to USA TODAY, McDonald’s said, “Intrinsic to the interest in our soft serve machines is our fans’ love of McDonald’s iconic McFlurry desserts and shakes,” the company said in the statement. “Nothing is more important to us than delivering on our high standards for food quality and safety, which is why we work with fully vetted partners that can reliably provide safe solutions at scale.”
As for the twitter jokes, don’t think McFlurry. Think monopoly, antitrust, competition and right to repair. Are you still laughing or do you need a nice, stiff drink to ease your concerns? Try a McFlurry.