Smart Cars, Telematics and Repair

Recent years have seen a surge in the use of automotive telematics. Telematics is the integration of telecommunications and informatics technologies. Using telematics in cars enables transmission of data communications between the car and other systems or devices. This opens up a wide range of possibilities, including the prospect of conducting remote diagnostics based on real-time access to the vehicle. Yet, as with any new technology, alongside its potential benefits, the use of automotive telematics could also have potential downsides. This Article explores the significant negative impact that the growing reliance on telematics systems could have on competition in the market for repair services.

Our analysis highlights two main areas where the use of telematics for vehicle diagnostics may pose a threat to competition and consumer choice. First, we focus on the manner by which manufacturers communicate with their customers via the telematics system. Due to the special relationship between car manufacturers and their consumers, which is often based on trust and loyalty, alongside the “captive audience” status of drivers, we argue that communications emanating from the car’s telematics system could be deceptive. Second, we explore the negative impact that the shift away from on-board diagnostics to telematics could have on independent repair shops’ access to diagnostic information.

Fortunately, the law can adapt to keep pace with these new technological and commercial developments. This Article articulates the combined multi-prong, multi-agency policy approach needed to maintain an effective right to repair cars in the new age of telematics. Among other things, our analysis supports an update of state consumer protection legislation and an increased policing by the Federal Trade Commission of practices employed by car manufacturers. In addition, we highlight the need to consider certain amendments to intellectual property laws that effectively aid car manufacturers in maintaining exclusive control over their telematics systems and diagnostic data.