Author: Rakshith Bhallamudi
Ph.D. Scholar, NALSAR and Legal Associate, TS Suresh + Associates
I. The Problem
The Planned Obsolescence (‘PO’) endorses a culture of wastefulness by spreading a “buy new and buy often” mindset. This raises various consumer protection, competition, intellectual property, and environmental concerns. While still scant, the detrimental effects of PO have not gone entirely unnoticed in India. And inspired by the developments in the United States of America and the European Union, recently there have been calls for a ‘right to repair’ movement in India. This movement challenges the manufacturers’ monopoly over repair processes to enable the individual who purchases a product to be the ‘complete owner’ of the product. However, the recognition of these detrimental effects has only remained a scholarly concern in the absence of any specific legislation, attempt to amend the current law, or introduce a new one.
II. Law as a Remedy-cum-Barrier
There are certain remedies for the customers in the case of PO. One of it can be found under the Consumer Protection Act, 2019 wherein recourse could be taken through ‘reasonable expectations’, as detailed in the case of Jaswant Rai v. Abnash Kaur. Under this, physical defects can be assumed in cases where a ‘reasonable purchaser’ would not have entered into a contract in the first instance if they would have known the true/real quality of a product. The second remedy falls under Competition Law. In the case of Shamsher Kataria v. Honda Siel Cars India Ltd, it was held that constraining the access of independent automobile repair units to spare parts using end-user license agreements is an anti-competitive practice. This harms consumer welfare against which intellectual property provisions cannot shield the abuse of the dominant position in India. Also, the case of Sanjeev Nirwani v. HCL recognized the manufacturer’s obligation to make spare and consumable parts exclusive to a product available, even beyond the warranty period, as paid services.
Given these developments, however, the law also ends up being a barrier in itself. The Copyright Act, 1957 can still bar modifications by a third party through its ‘Digital Rights Management Regime’ and ‘End-User Agreements’. Depending on particular factual scenarios, manufacturers could also take recourse to ‘package licensing’ under the Patents Act, 1970, to protect even the repairing process in addition to opposing any repairs on the ground of such repairs blighting the ‘normal’ functioning of the product, to potentially bypass the requirement of ‘in the course of trade’ requirement under the Intellectual property laws. Clearly, the position is far from settled as it is left to the Indian courts to decide matters on a case-to-case basis when it comes to the question of anti-competitiveness. All the three cases so addressed are the only ones usually cited in the matter of PO. As one can see, all of them predominantly focus on consumer protection or competition and very less on ‘environment’ if at all.
III. Attention to the 'Environment' Angle
It is important, arguably, even more than consumer protection and competition in the matter of PO that the angle of the environment is embellished for two main reasons. First, the angles of consumer protection and competition, while significant, are insufficient. Second, PO blatantly contradicts Intergenerational Equity and the current policy visualizations of the Government of India, specifically of Circular Economy.
Coming to the first aspect, there exist certain tinges which are made possible by the very operation of PO. To start with, they may make it increasingly difficult to arrive at an optimum decision on the lines of consumer protection and competition. To begin with, while there exists a ‘right to choose’ on the part of the consumers, there is no saying what would ensue if companies had been so transparent and left the customers free to choose whether to replace their products. For instance, in the case of mobiles, their obsolescence by way of “updates” may not be classified as “illicit behaviour”.
The next tinge stems from the requirement to carry out an in-depth analysis when purely looked at from the perspective of competition and consumer welfare. Usually, the cases that are to be decided on the ‘anti-competitiveness’ aspect have to deal with an in-depth economic analysis or concepts like ‘whole-life cost analyses’ of a product. This aspect was also in consideration in the Kataria case. The problem here arises when, for example, one argues that PO can in fact increase consumer welfare and advances competition in many such as by contributing to the increase in innovation rates; contributing to increase in research and development investments; and/or by catering to price-sensitive consumers through certain benefits and furthering competition thereby.
The final tinge here comes from the unexplored area of legal classification of PO and determining the scope to deter it under competition or consumer laws. Going forward, there will only be an increase in the cases concerning PO vis-a-vis competition and consumer laws as they may not provide enough scope for their deterrence. For instance, the argument of abuse of dominant position may not capture the situation of “spare parts worsening the former versions’ performance of the related durable good, if such spare parts are innovations that improve the functioning of the new versions of the same durable good”, nor do the competition laws allow for repression of PO.
These three tinges are only further complicated by the lack of a (legal) definition of PO, let alone an appropriate one. PO can be technological, psychological, physical, built-in, purposeful, planned, premature and style-based. A lack of appropriate definition for each of these, causes uncertainty both at the legal and policy level. Uncertainty not only as to which nuances ought to be addressed and treated equally and which doctrine/test to apply in a given case but also as to how to tailor regulations to each of these different types.
Now coming the second aspect. We have duly recognized the principle of intergenerational equity and it was reiterated by the Courts in several cases such as Goa foundation v. Union of India. The environment functions not only as a resource hub that enables development but also preserves the balance within the global ecology. A weak sustainability model of today will necessarily impact the generations of tomorrow.
As part of the sustainability programme that ultimately serves the principle of intergenerational equity, the Indian Government has some policy visualizations that it sees as essential to hold the balance. For the present purposes, the most relevant of these visualizations are the recent policies related to Circular Economy. Circular Economy is an economic approach aimed at removing waste by the repeated use of resources and for replacing the ‘take– make–use–waste’ linear model with a ‘circular’ model- which is seen by India as integral to achieving sustainable growth and consequently towards an ‘Aatmanirbhar’ Bharat. To ensure smooth transition towards this goal, 11 committees have already been formed to deal with 11 focus areas- one of which relates to end-of-life materials/products that pose substantial challenges or are seen to do so in the near future. The Government seeks to deal with these in a holistic manner. The most relevant of these focus areas directly pertaining to PO is Electronic Waste (E-Waste), for which Ministry of Electronics and Information technology is the concerned line ministry.
PO directly contradicts intergenerational Equity and the Circular Economy visualizations. Every production has an environmental cost as it entails environmental-asset consumption and any product that is disposable, easily perishable, irreparable and non-recyclable due to strategies of PO will prove to harm the environment. It may also essentially compromise the needs of future generations.
As far as Circular Economy is concerned, the current visualization of the framework aspires to be holistic. However, it does not seem to consider the aspect of PO in any chain as the process would initially only begin at the end-of-life cycle of the product. Therefore, if planned obsolescence is encouraged the way it is, by its continual ignorance, it will only result in the generation of more E-waste. Consequently, rendering the concept of Circular Economy counter-productive, not addressing the issue of sustainability.
III. Addressing the Issue of 'Planned Obsolescence'
One way to address the issue of PO is by amending the law or by drafting a suitable framework for its legal regulation. But Circular Economy itself gives a valuable opportunity by providing for an alternate way to deal with this problem. The opportunity is that of strengthening consumer protection by taking the “environmental route”. This route could entail the use of many strategies including but not limited to, for example, providing minimum requirements for sustainability logos and for information apparatus, placing additional focus on the Information and Communication Technology (ICT) and electronics sector as part of the Circular Economy framework, and/or by focusing prospective research on how best can ‘circularity’ help achieve sustainability in the Indian context. It, therefore, gives an opportunity to recognize and actualize a ‘right to repair’ in a different way while at the same time addressing the issues of separating E-waste at source, and at a more broader level, (not) compromising on the developmental goals (social, economic or legal) while effectively pursuing sustainability visions, as the case of European Union seeks to do through its Green Deal. An exclusive legal or regulatory framework to address PO may not be brought out anytime soon and the task of balancing various interests may be left to the judiciary. If anything is clear from the current situation, it is that there will be a struggle for consistency in decisions due to a number of overbearing factors. A landmark testament to this is the case of Srikant Kale v. Suzuki motorcycle India which did not follow Kataria’s standards and dismissed the claim without having due regard to ‘information asymmetry’ as a concept.
In lieu of the Conclusion
A balancing test that includes the environment alongside the angles of competition and consumer protection will not only be in line with constitutional principles but also gives a better chance of achieving desired balance. One important way it does this is by limiting the number of factors the adjudicating authorities are stressing into taking to properly and holistically decide a particular case pertaining to PO. In the Indian scenario, the stakes are high and wide- obsolescence of a product that is functioning is more likely to adversely affect lower-income consumers than higher-income consumers. Also impacting their financial freedom. Therefore, the test not only ought to balance but also must do so in a uniform and consistent way- something that can be achieved with a greater emphasis on the environmental angle.