Let’s say you make Acme Product 334, designed to work in tandem with Acme Widget 338. But one of your competitors sells a viable alternative to Widget 338. Can you predicate Product 334’s warranty on the condition that it’s only paired with Acme widgets? No, you can’t.
It’s an old law, actually, and one the Federal Trade Commission is enforcing. This spring, the FTC sent warning letters to six major companies that market and sell automobiles, cellular devices, and video gaming systems. (The FTC did not identify the companies by name.)
The FTC warned these companies against warranty agreements with provisions like these:
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- The use of [company name] parts is required to keep … manufacturer’s warranties and any extended warranties intact.
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- 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.
“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,” said Thomas B. Pahl, acting director of the FTC’s Bureau of Consumer Protection, in a statement.
Language like the examples above are commonly found on many company websites. After the FTC statement was released, media outlet Ars Technica reported finding such language on websites for Hyundai, Nintendo, and Sony.
It’s a good time to check your own warranty language to ensure you haven’t included similar clauses, and if you still happen to be pasting one of those “warranty void if seal is broken” stickers over any of your components, it’s time to peel them off. Just like the provisions above, those stickers are illegal under the Magnuson-Moss Warranty Act, which forbids blanket voiding of warranties based on aftermarket repair.