FTC Warns Companies About Warranty Restrictions on Consoles

After extending a warning regarding warranty restrictions to cellphone and automobile manufacturers, the Federal Trade Commission (FTC) is aiming at console manufactures as well. According to Polygon, the FTC sent a warning to six unnamed companies, which include those that “market and sell…video gaming systems”, that they could not condition warranty coverage based on the consumer using certain parts or service providers.

Essentially, if your console has a third party part or has been serviced by someone that isn’t authorized by the company, then said console manufacturer cannot deny you warranty coverage or even void your warranty. That would be in violation of the Magnuson-Moss Warranty Act, enacted in 1975 and outlining a manufacturer’s responsibilities when it comes to doling out warranties.

Certain instances of “questionable provisions” observed by the FTC include:

• “The use of [company name] parts is required to keep your…manufacturer’s warranties and any extended warranties intact.”
• “This warranty shall not apply if this product…is used with products not sold or licensed by [company name].”
• “This warranty does not apply if this product…has had the warranty seal on the [product] altered, defaced, or removed.”

Thomas B. Pahl, acting director of the Bureau of Consumer Protection for the FTC, stated that, “Provisions that tie warranty coverage to the use of particular products or services harm both consumers who pay more for them as well as the small businesses who offer competing products and services.”

Interestingly, as Kotaku noted last year, the Entertainment Software Association (ESA) had lobbied against a “right to repair” legislation because such a legislation  it could have consequences on a console maker’s copyright protection measures. Regardless, the FTC wants each company to review warranties and promotional materials and insure they don’t imply that warranty coverage is conditioned to certain parts or services. These will be checked in 30 days. Failure to adhere to these directions could result in law enforcement getting involved.

What are your thoughts on all of this? Let us know in the comments below.