How to Fix Cars* By Breaking “Felony Contempt of Business Model”

(*Also Wheeelchairs, Tractors, iPhones, Toasters and Printers)

A hackeneyed “hacker in a hoodie” image; in place of a face is a BMW steering wheel. Behind the figure is a three-tier stack of crushed cars.

On the origin of anti-features

They’re called “anti-features”: artificial limitations built onto the products we buy. These are limitations no customer asked for — and indeed, they’re limitations customers would pay to remove — if only they could.

The first anti-features were “DRM” (Digital Rights Management), like the “region-locks” on DVD players that stopped you from using a player you bought in one country to play back a disc you bought somewhere else.

No DVD owner ever woke up and said, “You know what, I wish that my DVD player would block my ability to play back my lawfully acquired DVDs.”

There was no market for this product. Anyone who bought a DVD player did so because they didn’t know about this restriction, or because they were indifferent to it. No showroom, no advertisement, no press-release bragged about region-locking.

Quite the contrary! A proliferation of small electronics manufacturers in the Pacific Rim began to manufacture DVD players that had no region locks, or where the region locking could be easily disabled (say, by keying a secret sequence into the remote). This was advertised, because while customers didn’t value region-locking, they were hungry for its absence. That’s what made it an anti-feature: people wouldn’t pay extra to get region-locking, but they’d actively seek out models that lacked it.

The triumph of de-regionalizing

Region-locking was an experiment. The first DVD players were released in 1996, the same year that the UN’s World Intellectual Property Organization (WIPO) passed its “Internet Treaties,” the WIPO Performances and Phonograms Treaty (WPPT) and WIPO Copyright Treaty (WCT). These treaties required member-states to pass laws that banned removing DRM.

Two years later, in 1998, the US Congress met this obligation by passing the Digital Millennium Copyright Act (DMCA), in the harshest, most far-reaching form imaginable. Under Section 1201 of the DMCA, “trafficking” in tools to remove DRM or even the information needed to make such a tool is a felony, carrying a five-year prison sentence and a $500,000 fine, even if no copyright infringement takes place.

That made the DMCA the perfect tool to cram an anti-feature like region-locking down customers’ throats. Watching a DVD you bought in India on an American DVD player didn’t violate copyright law (quite the opposite — the seller authorized the sale, you paid good money for it, it’s yours!), but because you had to bypass DRM to do so, anyone who sold you a device capable of playing an out-of-region disc was a potential felon.

But the consortium that created the DVD player — composed of major studios and the largest electronics manufacturers —didn’t anticipate how thoroughly their customers would reject the anti-feature, nor how many businesses would risk prosecution in order to step in and meet the market demand for anti-feature removal.

The DVD consortium simply hadn’t raised enough money to chase these rogue manufacturers around in the courts, and they couldn’t interest federal prosecutors in bringing cases against these operations. Most of the violators were small companies that would simply close up shop at the first sign of trouble and re-open under a new name the next day.

For manufacturers who were consortium members, the obligation to include anti-features in their products while smaller companies did not was unbearable. Household names like Sony, Panasonic and Philips were losing market-share to no-name companies from China and Malaysia, who were eating their lunch.

The consortium’s discipline broke: the largest consumer electronics companies in the world — flagship members of the DVD consortium! — began to make DVD players that could be easily de-regionalized and even tacitly advertised this fact, sending out sales materials that included boasts about “maintenance and diagnostic modes” that disable region-codes.

Revenge of the region codes

DVD region-coding was a bust, but the consortium had learned an important lesson. If they wanted to force the buying public to put corporate shareholders’ preferences ahead of their own interests, they would have to raise gigantic war-chests for legal enforcement, and convince federal prosecutors to bring criminal charges against jailbreakers, reverse-engineers and rogue manufacturers whose products allowed the public do things that didn’t violate copyright but still violated copyright law.

The organizations behind the DVD’s successors — HD-DVD and Blu-Ray — prepared for war before launch. When a cryptographic key leaked in 2007, the companies carpet-bombed the internet with takedown demands, both for the key and for software players that used it to deregionalize the new discs. Hardware manufacturers that made use of the leaked key to produce region-free players kept it quiet, and discipline among the major manufacturers held.

This cartel perfected the anti-feature playbook, and it has been the defining business-strategy of the digital era. As computers have infiltrated more and more products, new waves of manufacturers have figured out how to force their customers to tolerate anti-features, transferring ever-more value from the owners of products to the manufacturers of products.

There’s a name for this business-practice, courtesy of Jay Saurik, creator of Cydia, an alternative app store for iPhones: he calls it felony contempt of business-model.

Felony contempt of business-model

It’s no coincidence that this coinage came from a toolsmith working on Apple’s iOS devices. Apple was the first company to successfully convince a die-hard rump of its customers that anti-features were for their own good.

When Steve Jobs announced that he was going to sell you a pocket-computer that could only run programs that he permitted, an army of Apple fans took up the cause, arguing that it was outrageous for the owner of a computer to choose to thwart its manufacturer’s desires: “If you didn’t want to sublimate your interests to Apple’s shareholders, you shouldn’t have bought an Apple product!”

The success of Apple’s anti-features inspired a legion of copycats. These companies used anti-features to shut down independent repair, which produced the twin advantages of being able to gouge on service and parts, and being able to declare a product beyond repair, which meant you’d have to buy a new one.

Soon, Apple commanded an army of repair monopolists, ranging from tractor and car companies to electric shaver companies. They formed a powerful cartel that defeated dozens of state-level right-to-repair bills.

Companies like GM and John Deere said the quiet part out loud, telling the US Copyright Office that no one actually owned a car or tractor anymore, because these shipped with copyrighted software that you couldn’t modify or replace without committing felony contempt of business-model.

But felony contempt of business-model doesn’t stop with blocking repair: once it becomes a crime to modify your own property, companies can jam all kinds of anti-features down your throat:

Weaponizing IP

Felony contempt of business model isn’t just a creature of copyright law — far from it. Modern manufacturers have figured out how to erect a kind of thicket around their products that prevents third parties from modifying them or adapting them in ways that the original manufacturers’ customers desire.

We call this thicket “IP” and it is a tangle of patent, copyright, para-copyright, trademarks, trade secrets, nondisclosure, noncompetes, arbitration waivers, cybersecurity laws and contracts.

But all of that IP wouldn’t matter nearly so much except if the companies that wielded IP weren’t so concentrated. A handful of companies dominate almost every industry, and they form “consortia”— a polite term for a cartel — where they all agree to include a certain anti-feature in their products, and then they use IP to prevent startups from gaining purchase by offering to undo the anti-features the big guys are forcing us all to accept.

The failure of antitrust enabled the weaponization of IP, which in turn drove more antitrust failures. It’s a vicious cycle.

Oh Lord won’t you buy me a Mercedez Benz?

The tide is turning.

Sort of.

We, the people, have reached a breaking point. We don’t want to be viewed as mere consumers, as ambulatory wallets, or, as William Gibson memorably put it in Idoru:

Something the size of a baby hippo, the color of a week-old boiled potato, that lives by itself, in the dark, in a double-wide on the outskirts of Topeka. It’s covered with eyes and it sweats constantly. The sweat runs into those eyes and makes them sting. It has no mouth, Laney, no genitals, and can only express its mute extremes of murderous rage and infantile desire by changing the channels on a universal remote. Or by voting in presidential elections.

Unsurprisingly, it was the inclusion of anti-features in automobiles that broke the camel’s back. Americans love their cars, and the automotive industry itself has spent more than a century making the car a symbol of autonomy and freedom.

When the automakers told drivers that they were no longer free to fix their own cars or take them to the mechanic of their choosing, drivers were outraged. Wherever they were given the chance to reject this practice, the public did so, in overwhelming majorities.

Despite the public’s outrage, automakers continue to wage a war of extermination against independent mechanics, in the teeth of an FTC order to the contrary. The automakers clearly believe they are not merely too big to fail, but also too big to jail.

But repair is just the opening salvo in the car wars. The real opportunities for auto manufactuers is in subscription services. These are a source of recurring revenue for the car companies (which is another way of saying, “This is a source of recurring costs for you, the owner of the car”), but it’s also a way for manufacturers to extract money from the resale market.

The features you “buy” for your Tesla are actually only rented and Tesla will take those features away if you sell your car. Rather than you reaping the benefit of your upgrades by commanding a higher price from the next owner, Tesla gets to shift that value to their own shareholders. It’s as if the company that put a new roof on your home could take it away when you moved and then sell a new roof to whoever moves in next.

When it comes to anti-features, Tesla is way out in front of the competition. Other companies are laggards, perhaps because they understand that people mostly buy their cars to drive around in and not as an act of fealty to the leader of a cult of personality.

That’s why BMW’s forays into felony contempt of business-model are so hesitant, like charging a recurring fee to use your seat-warmers.

But make no mistake, all the auto-markers at champing at the bit to turn their cars into mobile rent-extraction platforms.

An Act Concerning Motor Vehicles Subscriptions

American drivers have figured this out and they’re pissed. Their symbols of freedom have become symbols of humiliating subservience.

Lawmakers are taking notice. In New Jersey, Assemblymen Paul Moriarty and Joe Danielsen have sponsored A4519: An Act Concerning Motor Vehicles Subscriptions, which bans “car makers or dealers from offering subscriptions in New Jersey for any feature that uses hardware already installed on the vehicle at the time of purchase unless that feature would represent an ongoing expense to the dealer, manufacturer, or a third party.”

As Ars Technica’s Jonathan M. Gitlin notes, New Jersey is home to BMW, which makes the bill both surprising — and a long-shot.


But there’s another approach the lawmakers could take, either as an alternative to bans or as a supplement to them: legalize modifying your own property to suit your own purposes.

Right to Repair bills and other anti-anti-feature policies focus on banning companies from selling intentionally broken products, or require them to provide unlock codes to authorized service depots.

What these policies don’t do is protect “adversarial interoperability” — reverse engineering and other guerilla tactics used to create products that undo anti-features.

A law that bans printer companies from blocking third-party ink is bound to have loopholes and will only work to the extent that prosecutors are willing to enforce it.

But a law that allows ink companies to shield themselves from “IP” claims for cloning security chips, bypassing firmware locks, pursuing other tactics that allow printer owners to override the manufacturers’ preferences and impose their own would truly challenge felony contempt of business model.

That is, rather than merely trying to hold too-big-to-jail companies to account, what if we protect smaller companies — companies that want to eat the big companies lunches by offering products that treat you as the owner of your stuff — from those giants?

This has a long and honorable history. Remember when new technology inspired excitement, rather than dread? Remember when new product announcements didn’t make you ask yourself, “How will this complicate things as I try to maintain privacy and sanity in a world that demands I have this thing to operate?”

Those days were the pre-felony contempt of business-model days. They were days when companies knew that if they included an anti-feature in their products, they were just creating a market opportunity for a competitor who would sell an add-on to remove it. They were days when companies that pressed on ahead with anti-features anyway were undone by tinkerers or commercial rivals or both.

The state that legalizes anti-anti-feature technologies will become home to businesses that thrive by making our lives better, by fighting our corner against the big businesses that want to make our lives worse.

Ironically, the giants of today, so bent on blocking new competitors from unfucking the products they have delivered to us broken out of the box, have their own origins in unfucking the products of the giants that dominated when they were getting started.

Take Lexmark, the giant printer company that was once part of IBM. In the 2002, Lexmark tried to make a felony contempt of business-model case against a small Taiwanese competitor called Static Controls, which was refilling and reselling Lexmark toner cartridges. Lexmark lost, and Static Controls’ business grew thanks to all the Lexmark customers who preferred Static Controls’s cheap remanufactured cartridges to the expensive Lexmark ones.

Today, Lexmark is a division of Static Controls.

If state legislators want to incubate a tech sector in their states, they should invite companies to relocate and safely thumb their noses at felony contempt of business-model. These states could become home to businesses like Ingenext, which offers Tesla owners a service that unlocks the features that Tesla locks up. This will let Tesla owners realize more value for their own property, and will force Tesla to compete to offer better service, rather than anti-features.

Unlocking anti-features is a rare tech policy that both the left and the right can support — it’s a pro-consumer policy that’s also pro-investor and pro-market. It’s why so many lefties have embraced my novella Unauthorized Bread (about jailbreaking toasters) and why Reason published my short story Sole and Despotic Dominion (about jailbreaking dishwashers).

The personality cultists who want a daddy figure to tell them how to use their property will continue to argue that if you don’t want to use your property your way, you should buy it from someone else, but to hell with them. That proposition wears thinner by the moment.