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Oregon’s Right to Repair Bill Could Inadvertently Fuel Parts Black Markets

by Juan Londoño

Oregon’s SB1596 is the latest effort at the state level to pass “right to repair” legislation. These laws aim to force device manufacturers to make tools, documents, and parts available to third-party independent repair shops. However, Oregon’s bill could inadvertently fuel black markets for spare parts, putting Oregonians at a higher risk of theft and other property crimes.

A key difference between Oregon’s bill and most right to repair legislation is its provision which would heavily restrict manufacturers of consumer electronics’ ability to use “parts pairing.” This is a software tool that manufacturers use to ensure that all the components of a device match the device’s serial number. By using parts pairing, manufacturers can ensure that any device repairer is using authorized and previously vetted parts that are known to work and that have been knowingly acquired from a legitimate source.

Advocates for the legislation argue that parts pairing severely cripples repair shops’ business model, as it does not allow them to “harvest” parts—repurposing functioning parts from otherwise broken devices—for future repairs. These repurposed parts would not match the serial number of the serviced device, part pairing software would flag a part as non-genuine.

Repair shops’ concerns about the effects on parts pairing on their business model is a legitimate one. However, they must also be aware that restricting parts pairing could bring significant harms for Oregonians, and even those residing beyond Oregon’s borders. Parts pairing has become a powerful deterrent against spare parts black markets, which usually feed off stolen and counterfeited devices to build out their inventory. Despite the introduction of “kill-switches,” which locks stolen phones and makes them unusable, stolen devices are still valuable in black markets as they can be stripped and sold for parts in markets around the world. Parts pairing works as an additional kill switch, preventing the use of unrecognized parts by unauthorized repair shops, reducing the value of stolen devices in these illegal markets.

However, if SB1596 were to pass, and parts pairing was restricted or prohibited, these spare parts would regain their value on the black market. This could inadvertently make shoplifting, pickpocketing, and robbery more profitable in Oregon, as well las in other states. Thieves can ship small, portable electronics from all over the country. These stolen parts could end up flooding the domestic repair market or be shipped overseas for a premium.

While Oregon’s policymakers are moving to restrict part pairing for smartphones and consumers electronics, other industries are moving in the opposite direction. For example, in Colorado, auto insurance companies and repair shops have rolled out a system that would help track catalytic converters, a car part that has seen a rise in theft due to its ease of access and high resale value. By using tear-resistant stickers, unique serial number identifiers, and chemical components, law enforcement officers, repair shops, and salvagers are making sure the parts they are using come from a legitimate source.

Repair shops and regulators pushing for a prohibition of parts pairing must understand the tradeoffs that are inherent to any policy. In this case, prohibiting parts pairing could cause more problems than it solves, as the practice acts as a significant deterrent for stolen parts black markets. As currently drafted, SB1596, would make stolen parts more valuable for resale, providing ill-intentioned individuals more opportunities for profiting of property crime, as it happens with other goods such as automobiles.  By prohibiting parts pairing, legislators could potentially make Oregonians a bigger target for crime.

Juan Londoño is a senior policy analyst at the Taxpayers Protection Alliance.

Published on March 5, 2024