LG Electronics USA, Inc. 2000 Millbrook Drive Lincolnshire, Illinois 60069 April 18, 2018 The Honorable David Harris Illinois General Assembly 221-N Stratton Office Building Springfield, IL 60056 Subject: HB 4747 (Digital Fair Repair Act) Dear Representative Harris: As a leading home appliance manufacturer with major operations in Illinois, including our appliance R&D Center in Buffalo Grove, LG Electronics USA strongly urges that HB 4747, an act concerning the servicing and repair of digital electronic products, be withdrawn from consideration by the Consumer Protection Committee and the Illinois House of Representatives. Home appliance manufacturers are continuously innovating in order to make better and more functionally convenient products for consumers. This includes ensuring that consumers have access to highly educated, trained and certified repair technicians. LG works to not only ensure that authorized repair providers are properly trained and certified, we also take necessary precautions so that when a repair provider enters a private home that the home owner as well as the property are safe and secure. The fact that repair providers enter consumers’ homes to conduct appliance repairs presents a different set of circumstances regarding the repair of digital electronic equipment. HB 4747 comes into conflict with important industry doctrines:    Safety: HB 4747 poses serious product, property and consumer safety concerns. Cyber Security: HB 4747 requires manufacturers to make certain technologies available to independent third parties who may not have the proper certification and training, thus exposing the home to cyber threats. Manufacturer’s Warranty: HB 4747 negates a manufacturer’s ability to honor factory warranties by allowing independent third parties access to component parts and all diagnostic information. SAFETY Safety is LG’s top priority. We design home appliances that are as safe as they are useful and consumers recognize this commitment. According the Association of Home Appliance Manufacturers (AHAM), there are more than 860 million appliances in use largely without incident and 93 percent of consumers believe home appliance manufacturers do a good job in providing safe and quality appliances. Moreover, another 85 percent understand that safety policy is a top priority for the industry. The primary reason that HB 4747 is of concern to LG and the rest of the home appliance industry is the broad safety concerns presented by the legislation. There are three principal safety concerns that HB 4747 presents: product safety, consumer safety and property safety. -2Product Safety. HB 4747 requires that manufacturers make all diagnostic and repair documentation available to independent third parties or equipment owners. Today, home appliances contain highly advanced operating systems and many of these products are considered smart or connected devices. Manufacturers develop diagnostic tools for certified engineers who have the educational and technical background and training necessary to troubleshoot, diagnose and conduct repairs to the appliance. HB 4747 would broadly expand the universe of technicians that could access diagnostic tools and information. Also, manufacturer authorized servicers are typically required to perform repairs with manufacturer authorized parts that have been tested and qualified to meet the reliability and safety requirements of the home appliance product. Opening up the repair process to any third-party services will loosen the control in this area significantly and could have a considerable impact on the safety and reliability of the product. In addition, manufacturers control the software used for service technicians. Without proper training, significant damage to the appliance and the home can occur if these tools are improperly used. Today, modern appliances contain sophisticated and technologically advanced electronics and internal controls that are uniquely designed and programmed for specific products. These electronics and internal controls contain safety features (both software and hardware) that are relied upon for the safe operation of the appliance. Manufacturers very strictly and carefully control the access to these features by their own certified service professionals when performing any diagnostics and repair. Manufacturers often invest substantial resources to ensure diagnostic tools are impervious to failure and tampering by the manufacturers own agents, the manufacturer will employ software and Information Technology tools specific to its agents to guarantee the service. The same cannot be ensured once these tools are opened up to third-party servicers. It could be detrimental to the inherent safety of the appliance if access were to be granted in the public domain where defeating any of these features (either intentionally or inadvertently) could happen during diagnostics and repair, which could then create potential safety hazards to the consumer. For example, the home appliances industry is constantly innovating and advancing our products in order to deliver optimum solutions to consumers, which are energy efficient and continually better for the environment. Newer refrigerant gases that are non-ozone depleting and have very low global warming potential are an example. Comprehensive training is required in order for a technician to handle and conduct repairs on systems that contain different types of refrigerant. Mixing refrigerant types can be problematic and dangerous. An older product designed to operate with R134a gas refrigerant does not have the appropriately designed relays and electrical mechanical components for the newer R600a refrigerant. R600a gas is a flammable refrigerant gas that has positive attributes to reduce climate change and has started to be added to new refrigeration products in the U.S. market. It is critical that technicians are properly trained to identify which product utilizes which gas and how the gas is properly handled to ensure the utmost safety. Authorized servicers can be directly trained and tools provided to 1) allow technicians to understand the systems included on every model and 2) repair those products appropriately. The same concerns hold true for the manipulation of LPG and natural gas in cooking products, dryers and water lines and the manipulation of 110V and 220V electrical connections. If not properly installed, leaks and overheating can occur. -3It is very concerning that HB 4747 evades many of the safety provisions that Illinois-based UL (Underwriters Laboratory) and others test against. UL standards and independent laboratory testing ensure that the products the customer is purchasing are safe; requiring OEMs to provide these tools circumvents the role of safety standards. Property Safety. Appliance repairs when not performed correctly can be the cause of property damage, e.g., flooding and fires. Insurance claims as well as increases in homeowner’s insurance premiums could result if independent third parties improperly perform in-home repairs. Additionally, in the event of significant property damage and/or personal injury, the manufacturer could face legal claims. Manufacturers, in general, have process and procedures in place that track repairs completed through their servicer network. This allows the manufacturer to create traceability of repairs for their customers/consumers and is one of the critical factors if fire or another sort of property damage were to occur. Opening up this domain to third-party servicers, inhibits the ability for manufacturers to track any repairs made to home appliance products and has the potential to create issues in determining liability if the source of the repairs cannot be readily identified. According to AHAM, traceability is also important because improper repair or servicing can be a cause of appliance fires. Finally, this assists insurance companies and other entities if the incident requires investigation. Consumer Safety. The nature of appliance repairs requires repair technicians to enter the homes of consumers. In-home safety and security is of paramount importance to appliance manufacturers and we assume the same holds true for independent service technicians. Technician certification generally requires extensive background checks as well as drug screening, as well as technical and safety training. If manufacturers are required to make their technical information public knowledge, they no longer have the ability to address whether the technicians who are entering the homes of consumers have completed the necessary technical, safety and security checks. CYBER SECURITY In an increasingly connected world, the threat of cyber-attacks has extended into the home through connected technology. In fact, connected devices will be in nearly every home by 2020, and the total number of those devices is expected to reach 26 billion. Home appliances touting “smart features” are already in the market. LG is leading the way in bringing connected appliances to customers around the world and are committed to addressing those concerns so that consumers are able to access the full, life-enhancing potential of connected appliances while minimizing potential cyber threats. Without the proper training, independent third-party service providers could unknowingly expose consumers to cyber threats while conducting unsecured repairs to these products. HB 4747 completely disregards the security implications brought to light by requiring the release of firmware and other software systems within home appliances. Hacking, data privacy, cyber threats are real concerns, as homes become more connected. LG, therefore, cannot comprehend why HB 4747 has ignored these very real threats and will likely make home appliances more vulnerable to cyber-threats and corruption. For example, security key pairings have to be embedded in the firmware. If we are required to provide the firmware to third parties providing the keys to the operating system, once the keys become public, it completely breaks the firmware security chain and the home appliance is not fully secure. -4This also applies to remote and wireless interaction. Connected appliances in some circumstances require Wi-Fi connectivity to the consumer’s personal in-home network. Manufacturer-authorized technicians when performing repairs or instructing consumers on the use of such products could gain access to those private networks. Manufacturer authorized technicians are under contract, for whom the authorized service providers may have traceability. Opening that access up to independent third parties may give unauthorized personnel access to consumer's private Wi-Fi network and create opportunity for further risk exposure. Simply put – HB 4747 and cybersecurity are like oil and water. MANUFACTURER’S WARRANTY Most manufacturers often explicitly state that the warranty on the product is void in case of defects or damage caused by the use of unauthorized parts or service . As such, this bill has the potential to harm consumers rather than providing benefits. Written warranties on new major appliances usually cover the cost of parts and labor to repair defects in materials or workmanship, which appear under normal home use. Warranties often cover defects over a predetermined period after purchase or delivery. It would be extremely difficult for manufacturers to honor product warranties in circumstances in which independent third-party servicers are granted full access to manufacturer’s software, parts and products because they could damage a product with an improper part or repair. This could lead to a shortening of warranty commitments and protections for the consumer. We appreciate the opportunity to present these views to the committee. To say the least, HB 4747 raises serious safety, cyber-security and contractual concerns. As a strong employer in Illinois and leading home appliance manufacturer, LG joins AHAM in strongly urging you to reconsider this bill. At the very least, HB 4747 should be amended to reflect the appliance industry views. We look forward to discussing these concerns in more detail with you as you review this legislation. Cordially, John I. Taylor Senior Vice President, Government Relations LG Electronics USA Lincolnshire, Illinois cc: The Honorable Jim Durkin, The Honorable Tom Demmer, The Honorable Toni McCombie, Speaker of the House Michael J. Madigan, The Honroable Jay Hoffman, and the Honorable Timothy D. Mapes