In late November, the Federal Trade Commission (“FTC”) released a staff perspective paper (“the Paper”) detailing the results of an FTC study that surveyed 184 “smart” devices, ranging from smartphones to hearing aids to door locks, to determine whether manufacturers disclose how long they provide software updates for their products and related apps. Without such updates, according to the Paper and the corresponding press release, these products “may lose their ‘smart’ functionality, become insecure, or completely cease to operate.”
The Paper, titled “Smart Device Makers’ Failure to Provide Updates May Leave You Smarting,” states the study’s “big takeaway” is that about 89% of the manufacturer web pages surveyed failed to disclose how long the products would receive software updates. Even where manufacturers did disclose information about the duration of software support somewhere on their website, FTC Staff concludes that “the lack of uniformity in [the information’s] location, presentation, and language makes it difficult to compare one product with another.”
FTC Staff cautions that manufacturers’ failure to disclose the duration of their software support may, “depending on the facts,” violate the Magnuson Moss Warranty Act. Specifically, the Paper cites a provision of the Act that requires written warranties to include “a clear description and identification of products, or parts, or characteristics, or components or properties covered by and where necessary for clarification, excluded from the warranty.” See 16 CFR § 701.3.
The Paper also states that this failure to disclose information about software updates could constitute an unfair or deceptive practice under Section 5 of the FTC Act. As to deception, the Paper states that if a manufacturer makes an express or implied representation regarding how long the product will function or be useable, it may be a deceptive practice if the manufacturer fails to disclose how long it will provide necessary software updates for that period. As to unfairness, the Paper states that it is appropriate to consider the scope of injury caused by a failure to provide updates or a failure to disclose the duration of software support, whether such injury is reasonably avoidable by consumers, and whether there may be any offsetting benefits arising from the failure to provide software updates or disclosures about the duration of software support.
Finally, the Paper concludes more generally that the issue “warrants further consideration by policymakers and law enforcers,” suggesting that the FTC may continue to evaluate such practices for potential enforcement in the future.