If you buy a smart car with connectivity features like information and entertainment, you’d expect them to last the lifetime of the car, right?

Reports coming in to our Belgian member Testachats/Testaankoop suggest this is not the case.

Owners of new, connected cars have found that the price of the car only includes connected features for three years – after that a paid subscription is required. 

In a case concerning Audi, the company eventually waived the customer’s continuation payment as it conceded they had not been made aware of the charge at the time of purchase. 

But these consumer complaints shed light on a much bigger trend that individual remedies won’t fix – software obsolescence as a business model in the auto sector.

• What is software obsolescence as a business model?

• Premature obsolescence, where manufacturers design in failure or block off repair options to stimulate demand for new products, is nothing new.  
• Software-induced obsolescence is a different version of this, where perfectly functioning physical products are made unsafe or unusable as software updates or compatibility are withdrawn. As software updates and usability are tethered to the software provider, they have a lot of discretion in setting the terms on which a device can remain in use.  
• If companies choose to discontinue support consumers are left with some pretty unappealing choices: make do with reduced functionality, pay more for a service that they understood they had signed up for, or replace the device.
• In the case of cars, some connectivity may be essential to vehicle safety and security, and some features may not render it unusable but still leave the owner paying for things they expected to have for the duration of the car’s life. 

The software obsolescence witnessed in the auto sector, goes hand in hand with a business model that turns a one-off car sale into multiple recurring interactions.   

And, with these increased points of contact manufacturers have more occasions to advertise on upgrades or replacement, or flex their muscle by switching off features on their terms.

Software obsolescence: intentionally shortening lifespans  

Euroconsumers has been keeping a close watch on this emerging practice. The position paper Software obsolescence as a business model? unpacked the concept, described case studies and identified the policy gaps that have allowed this practice to grow.

Last year, we called out Microsoft for its plan to limit security support for Windows 10 operating system which would push consumers to upgrade to newer devices able to run later versions before their device was done with. 

A reversal by Microsoft was welcomed, but it showed that they have the tools in hand to both stop products functioning and to extend product lifespans. They originally took the decision to cut support to increase device sales, profit and e-waste, which could become a growing trend:

Software obsolescence: coming for your cars

The Audi case suggests that software obsolescence as a profit motive is now taking root across the growing number of products relying on apps or cloud-based services to function, like smart home appliances, TVs and now cars.

Getting to grips with the scale of the practice in the auto industry is not easy. Initial spot checks on some other vehicle brands including Volvo, Kia and VW found that terms and conditions for software and app support differ depending on the model of car and even the version. 

Checks revealed that it was common practice to limit the car’s connectivity with smartphone apps over time. However, other brands like Lynk & Co offer the full connectivity option for life, showing that this is a commercial choice made by brands.

Of course, the time-limitations of free software licensing and support is usually stated somewhere in the point-of-sale documentation– but is informing consumers of this unfair and costly practice enough?

Our legal teams are reviewing the legal framework regarding subscriptions for new cars to determine if it is fit for purpose in an increasingly connected world.

Can consumers be empowered to use connected products on their terms? 

Smart connected products including vehicles promised to empower consumers with information, convenience and personalisation, but until clearer rules are set out some companies will continue to hold consumers to ransom.

Our position paper pointed out gaps in policy that are enabling software obsolescence to take hold despite a clear overall direction towards keeping all products, connected or not, in use for as long as possible.

Existing legislation can address misleading practices or ensure basic functionality, but there is currently no binding EU-wide minimum duration for software support.

There are also unresolved questions about what digital ownership means in practice in the connected age. In many cases, consumers only hold a licence to use the software in a product, which can be revoked or restricted by the provider. The result is that even products which are still supported can become unusable if access is withdrawn.

This has parallels with aspects of the right to repair and the permissions to use third party access.  In this scenario, third party providers might be used to reinstate the access that the original provider had revoked. Does ‘ownership’ of a  product allow someone to hack their car to get it working again by buying a service to unblock features?  

Until these gaps and key questions are addressed with clear and enforceable rules, both on minimum support periods and on consumer rights to digital products, consumers will remain vulnerable to premature, software-driven obsolescence.