How IP laws lead to broken ice cream machines.
Social media was in a flurry after President Trump recently spent a day working at a McDonald’s branch. The stunt was decent PR for the president and was accompanied by a fair share of memes—including one from Trump himself.
Trump’s joke here plays off a widespread experience McDonald’s customers have. Oftentimes, when you order a McFlurry at McDonald’s you’re met with a disappointing response: “Our ice cream machine is broken.”
How could it be that the ice cream machines at McDonald’s are so consistently broken? It turns out that, until just recently, it was illegal to hire most people to fix them. To understand why, we’re going to have to take a detour into the world of intellectual property.
DMCA Woes
So why has it been illegal for McDonald’s to hire people to fix their ice cream machines? Well, that’s where the Digital Millennium Copyright Act (DMCA) comes in. If you’re familiar with the DMCA, this is probably confusing to you.
Generally the DMCA is a big concern on content creation platforms like YouTube. If someone uses copyrighted music, he or she gets DMCAed. This is slang for when a video gets its monetization redirected to the owner of whatever copyrighted content was used.
DMCA takedowns draw a lot of ire, because the law is clumsily applied and often even legitimate uses of copyrighted content (e.g., fair use) are punished.
But the DMCA extends beyond content creation, as chronicled by Elizabeth Chamberlain of iFixit, an organization dedicated to ensuring that product owners have the right and ability to fix their property. Many machines ranging from phones to ice cream machines utilize copyrighted software to function. Sometimes, this software limits product users more than they’d like.
For example, iPhone software locks users into particular user interfaces. If a user wants to customize past some point, he’s going to have to modify the software more than the company intends. This process, called jailbreaking, involves breaking through “digital locks.” The DMCA often interprets breaking these locks as a violation of the intellectual property of the copyright holder.
The problem gets even worse when you recognize that fixing things—say, McDonald’s ice cream machines—means breaking past those digital locks. This means anyone hired to repair the machine would need an official blessing from the manufacturer.
However, things have changed. As of October 18th, the opening of digital locks for “retail-level commercial food preparation equipment” is now exempt from this DMCA rule. McDonald’s will now be able to hire from a larger group of people to fix their ice cream machines.
Note, this is only an exemption to the rule. The rule itself has not changed. Second, other regulations still hamper McDonald’s franchise owners from fixing their own machines. As Chamberlain points out:
While it’s now legal to circumvent the digital locks on these machines, the ruling does not allow us to share or distribute the tools necessary to do so. This is a major limitation … few will be able to walk through it without significant difficulty.
It is still a crime for iFixit to sell a tool to fix ice cream machines, and that’s a real shame … Without these tools, this exemption is largely theoretical for many small businesses that don’t have in-house repair experts.
So your chance of getting a McFlurry has improved, but you can’t quite celebrate a total win yet.
The battle against these DMCA laws isn’t limited to ice cream machines. The “right to repair” movement spearheaded by organizations including iFixit has already battled for exemptions for medical devices, consumer devices like phones and tablets, vehicles, and assistive technologies for people with disabilities.
Several states such as Massachusetts, Minnesota, California, Oregon, and Colorado have passed laws under the banner of “right to repair,” though these laws range from disclosures of repair techniques to banning certain bundling practices, and none of them are able to undermine the DMCA more broadly.
Other laws include a federal bill passed in 2014 which allows phone unlocking, and a recent attempt has been made to pass a federal “freedom of repair” law with no success as of yet.
Digital Locks and Digital Rents
Why would such a system exist? Well, this sort of issue comes out of the fundamental nature of intellectual property (IP).
Generally, when we buy a product, we think of ourselves as owners of that product. If I buy a bike, I can do what I want with it. I can ride it, sell it, or even melt it down. The bike belongs to me, not the manufacturer, so the manufacturer has no say.
However, this is not true of intellectual property. When you buy a CD, you aren’t allowed to do what you want with it. You can still use it or break it in half, but you can’t make copies of the files and sell those files. In reality, ownership of something can be attenuated (in this case by government force of law).
Whether IP is morally legitimate or not is beyond the scope of what I want to discuss here, but the major point is that IP opens us up to some exploitative behaviors.
When a person or group spends resources in order to capture already-existing wealth, economists call this rent-seeking. Rent-seeking is different from profit-seeking because, while profit is the result of creating value, economic rents (not to be confused with the normal word rent) deal with already-existing wealth which is subject to capture.
One of the most common means of rent-seeking is politics. Producers’ use of DMCA law here is a perfect example. Copyright law exists to prevent people from stealing the IP of others, but no such theft is going on when people bypass digital locks. McDonald’s isn’t stealing from ice cream machine producers when they fix the machines they bought.
However, ice cream machine producers can expend resources to invest in IP such that they are able to capture some of the value of the already-purchased ice cream machines. In this case, the producer uses the law to retain the right to determine how the machine is repaired, and, in theory, the company could benefit from this by selling the right to repair to a licensed repairman or something along those lines.
It seems strange that laws have been preventing (and to some degree still prevent) McDonald’s from fixing their own ice cream machines, but as long as the political system is determining who gets to own what, it will always be in someone’s best interest to compete for rents from property that doesn’t belong to them.
