A seller should not be allowed to change the terms of the sale after the sale.
Just as a builder cannot enter your new-construction house after you purchase it and swap out the furnace for a proprietary model that only they can repair, or charge a rental fee for your toilets, or paint their logo on the side of the building a year later, manufacturers of internet-connected products should not be allowed to remotely access your product and reduce functionality, charge new subscriptions, or introduce advertisements where none existed before. Recent examples of this behavior include:
HP pushed a firmware update causing printers to reject third-party ink cartridges and refuse to print, even though these printers had previously accepted third-party cartridges, and consumers bought these printers with the understanding that the ink cartridges were not proprietary.
Miku baby monitors advertised advanced monitoring features like breathing monitoring and sleep tracking, but after a company restructure, many of those previously included features became available only through a paid subscription, substantially altering the original deal between the manufacturer and the consumer.
Samsung pushed software updates to their smart refrigerators which added advertisements to the screens where none existed before. Mind you, these are $2,000 to $3,000 refrigerators, but apparently Samsung didn’t get enough money from the original sale, so they unfairly altered the terms of the sale after the sale.
It is unacceptable for manufacturers to change the terms of the sale after the sale. We need new consumer protection laws to prevent this. This is fraud. This needs to be made explicitly illegal in the United States.
The purpose of this legislation is not to punish good-faith manufacturers acting for legitimate safety, security, or legal reasons. The purpose is to prohibit the increasingly common practice of reducing product functionality after the sale for financial gain. Companies should remain free to improve products, fix defects, address vulnerabilities, and comply with legal requirements. What they should not be free to do is retroactively transform a purchased product into a worse product than the one consumers originally bought.
The Preserve Product Functionality Act
Section 1. Legislative Findings
The Legislature finds that:
(a) Increasing numbers of consumer products remain connected to the internet after sale and are capable of receiving remote software updates and configuration changes.
(b) Such connectivity enables manufacturers to alter product functionality after purchase.
(c) Consumers reasonably expect that the features, capabilities, compatibility, and functionality of a product will remain as they were at the time of purchase absent legitimate safety, security, or legal compliance issues.
(d) The unilateral reduction of product functionality after sale erodes the principles of product ownership, undermines consumers’ ability to make informed purchasing decisions, and constitutes an unfair and deceptive business practice.
(e) Consumers should be protected from post-sale reductions in functionality, newly imposed restrictions, undisclosed termination of internet-dependent functionality, undisclosed advertising within the product, and new advertising introduced after purchase.
(f) certain product functionality may depend upon cloud services or other external infrastructure which cannot be maintained indefinitely. Consumers are nevertheless entitled to know, before purchase, the duration of such support and the consequences of its termination so they may make informed purchasing decisions.
Section 2. Definitions
“Covered product” means any consumer product capable of receiving software updates, remote configuration changes, cloud-delivered functionality, internet-delivered content, or remote management after sale. For purposes of this Act, software, firmware, cloud functionality, digital services, online features, subscriptions included with purchase, and internet-connected capabilities marketed, advertised, or represented as part of a product shall be deemed part of the product itself and shall be subject to all protections established by this Act.
“Material reduction in functionality” means any change that:
- removes a feature available at the time of purchase;
- restricts compatibility with third-party products or services previously supported;
- introduces new limitations on repair, modification, or use;
- degrades performance;
- imposes new subscription requirements;
- disables previously available capabilities;
- introduces advertising not present at the time of sale.
- a reasonable consumer would consider important when deciding whether to purchase the product.
“Advertisement” means any paid, sponsored, compensated, promoted, marketed, preferentially displayed, or commercially motivated content, recommendation, message, product placement, solicitation, or communication intended to encourage the purchase, use, or consideration of a product, service, brand, business, or commercial offering. The term includes content presented as recommendations, featured products, promoted content, sponsored content, suggested purchases, partner offers, or similar designations regardless of the terminology used by the manufacturer. The term shall be construed according to the substance and effect of the content rather than the label applied to it.
“Core functionality” means any function, capability, interoperability feature, or performance characteristic that a reasonable consumer would consider when deciding whether to purchase the product, either at all, or compared to a different product.
“Manufacturer” means any person or entity that designs, produces, imports, licenses, distributes, operates, controls, or maintains a covered product or any software, firmware, cloud service, or digital functionality associated with such product.
Section 3. Prohibition on Post-Sale Functionality Reduction
No manufacturer shall modify, update, configure, distribute software for, or otherwise cause a covered product to undergo a material reduction in functionality.
A manufacturer shall not:
(a) remove features available at the time of purchase;
(b) disable compatibility with third-party products, parts, consumables, accessories, software, or services that were compatible at the time of purchase;
(c) impose new restrictions on repair, modification, or interoperability;
(d) convert previously included functionality into a paid subscription service;
(e) reduce performance, capabilities, or usability for commercial purposes.
(f) terminate cloud services, online functionality, authentication systems, or manufacturer-operated infrastructure in a manner inconsistent with the support disclosures required by Section 4A.
Section 4. Permitted Updates
Nothing in this Act shall prohibit updates reasonably necessary to:
(a) correct software defects;
(b) address cybersecurity vulnerabilities;
(c) comply with legal obligations;
(d) improve performance or functionality;
(e) add optional features that do not diminish existing functionality.
The burden of demonstrating that an update falls within this section shall rest upon the manufacturer.
Where a manufacturer claims that a reduction in functionality was necessary to address a security, safety, or legal compliance concern, the manufacturer shall demonstrate by clear and convincing evidence that the restriction was reasonably necessary to address a specific, documented, and non-speculative concern and that no less restrictive alternative was reasonably available.
Generalized concerns regarding security, fraud prevention, intellectual property protection, competitive advantage, unauthorized repair, third-party interoperability, or the use of non-manufacturer parts, consumables, software, or services shall not, by themselves, constitute sufficient justification under this Section.
Section 4A. Product Support and End-of-Life Disclosure
A manufacturer of a covered product shall clearly and conspicuously disclose, prior to sale:
(a) the date through which software updates, security updates, cloud services, online functionality, and technical support are guaranteed;
(b) any product functionality that depends upon cloud services, manufacturer-operated servers, subscriptions, or other external infrastructure;
(c) the specific functions that will cease to operate, be materially degraded, or otherwise be affected upon termination of such support or services.
The disclosed support date may be extended by the manufacturer but shall not be shortened after the product is offered for sale.
No manufacturer shall offer a covered product for sale during the final 12 months preceding its disclosed support termination date.
A manufacturer shall provide notice to registered owners:
(a) not less than six months before the disclosed support termination date; and
(b) on the date support terminates.
Such notices shall clearly identify all functionality that will be affected by the termination of support.
Such notices shall include clear information about actions consumers can take if they want to continue using the connected consumer product in a secure and effective manner, and shall provide a list of features lost in, and vulnerabilities and security risks that are likely to result from such product’s end of life.
Failure to provide the disclosures required by this Section shall constitute a material omission and an unfair, deceptive trade practice.
Section 5. Advertising Disclosure Requirements
A manufacturer shall not display advertisements on a covered product unless:
(a) the presence of such advertisements was clearly and conspicuously disclosed prior to sale;
(b) the disclosure appeared in product marketing materials, packaging, and online product descriptions;
(c) the consumer was informed of the nature and location of such advertisements before purchase.
The disclosure required by this section shall not be satisfied solely through terms of service, license agreements, privacy policies, or other post-purchase documentation.
Section 6. Prohibition on New Post-Sale Advertising
No manufacturer shall introduce advertisements onto a covered product after sale if such advertisements were not present at the time of purchase.
Consumer consent obtained after purchase shall not be valid unless the consumer is offered the ability to permanently decline such advertising without loss of core functionality.
Section 7. Non-Waiver of Rights
The rights established by this Act may not be waived through:
- terms of service;
- end-user license agreements;
- click-through agreements;
- privacy policies;
- or any other standardized consumer contract.
Any provision purporting to waive rights under this Act shall be void and unenforceable.
Section 7A. Anti-Circumvention
No manufacturer, affiliate, subsidiary, contractor, licensee, agent, successor entity, or other person acting on behalf of a manufacturer shall structure, label, redesign, outsource, reclassify, or otherwise arrange a transaction, service, software feature, advertisement, update, or business practice for the purpose of avoiding the requirements of this Act.
Courts shall construe this Act according to its substance and purpose rather than the form or terminology employed by a manufacturer.
Any act undertaken primarily to evade the protections established by this Act shall constitute a violation of this Act.
Section 8. Enforcement and Remedies
A violation of this Act shall constitute an unfair and deceptive trade practice.
Any manufacturer found to have violated this Act shall be liable for:
(a) disgorgement of all revenues and profits attributable to the violation;
(b) civil penalties equal to not less than three times the amount of such revenues and profits;
(c) actual damages;
(d) injunctive relief;
(e) attorney’s fees and costs.
Where profits cannot reasonably be determined, courts may award statutory damages of not less than $10,000 per affected consumer.
A prevailing consumer shall not be required to demonstrate economic injury where a violation of this Act has been established.
Section 9. Private Right of Action
Any consumer harmed by a violation of this Act may bring a civil action individually or as part of a class action.
Section 10. Effective Date
This Act shall take effect one year after enactment.