Getting A Second-Hand Bill

First off, I want you to imagine something: the bloody murder that computer users far and wide would scream if they couldn’t buy, say, a used laptop without being forced to pay money to get it working again.

Or, imagine if a Blu-Ray or video game stopped working if you sold the physical object. Or, worse, a book.

That shouldn’t be a reality, but a spate of recent stories have shown that companies that built clever internet-connected hardware just realized they’re competing with their own equipment on the used market.

The first notable example I heard involves a company called Happiest Baby, which makes a $1,700 bassinet, Snoo, that’s said to be so effective at its job that it helps parents get more sleep. Unless you’re constantly having kids, bassinets have limited usefulness, because kids grow up fast—and that means these things end up on the secondary market fairly quickly, often for prices less than half of the original selling rate.

The obvious solution to this problem is to lower the price to a level that makes the bassinets less attractive on the used market, but that’s not what Happiest Baby did. Instead, the company buried all the good features of this tool behind a $20 monthly subscription, just expensive enough to deter second-hand sales. It’s still cheaper than buying it new, but now you’re stuck with a monthly bill, as well as a bassinet that will fall into disuse within six months.

Next on the list is the company Anova, which develops a line of smart sous vide devices. The company recently upset warm-water cookers in two different ways: first, it started charging for its previously free app, and second, it is dropping support for Wi-Fi connectivity for older devices.

Fans of internet-connected stationary bikes: You will love the extra fees. (Wikimedia Commons)

But that’s nothing compared to what Peloton is doing. The company, which charges a monthly subscription fee no matter how you bought it, is now tacking on a $95 “activation fee” for turning on a model you bought from the secondary market.

In both cases, Peloton, Anova, and Happiest Baby are weaponizing their software against the used hardware market in a way that deeply harms consumers. Essentially, this is an extension of what we’ve been seeing since at least the 1980s, when Nintendo was suing rental stores.

Essentially, the creators of a piece of media or equipment want to dictate the rules for the secondary market.

The most successful example of this kind of shift has appeared not in the commercial space, but in the library sector, where electronic books are treated as objects to license from large publishers. They should be treated the same as physical objects that should fall under the first-sale doctrine. But the publishing industry held all the bargaining power and decided the model needed a redo. And for that, we all lose.

In the case of hardware manufacturers, one imagines the dream is to turn literally every object into a printer somehow. Printers need paper, ink, and toner.

Sure, you can get paper from anywhere. But manufacturers really want you to buy toner directly from them. Why? Because they make more money that way. The CEO of HP recently talked of making printer ownership a subscription, which solves the problem of working around unwanted competitors. It neutralizes its consumer-friendly competition.

But as proven by the cases of Peloton, Happiest Baby, and Anova, the real secret to making hardware that pays dividends years after the fact is to hide essential hardware functionality in software.

Right to repair is a fundamental tenet of consumer rights, but we may need to push for more. My suggested starting point: Introduce a law that requires manufacturers to release the source code to “smart hardware” to the public within two years of ending support for the device. This would force manufacturers to either have a lasting business plan for equipment that doesn’t degrade over time, or to give the FOSS community the building blocks to keep otherwise functional products going.

We also desperately need a second look at the first-sale doctrine: The fact that companies are working around it through such cavalier means proves it’s no longer successfully doing its job. (It has honestly needed a second look for 15+ years.)

There is no reason that a piece of equipment should stop working, just because you didn’t put your credit card number into the app. Changing the contract mid-stream for a piece of hardware? That shouldn’t be allowed.