At what point do warranties shift from a shield for consumers to a mechanism of market control? That is the question at the heart of a recent battle over Harley-Davidson’s warranty terms, a fight that extends far beyond motorcycles and into the broader consumer and luxury industries, where after-sale control is often as valuable as the initial sale, itself. In a significant ruling this month, the Seventh Circuit affirmed the dismissal of consumer claims, signaling that warranty law may give brands more leeway than challengers had hoped.
At stake in the case – a multidistrict litigation formed in 2022 – is whether Harley-Davidson’s warranty practices unlawfully tie consumers to its own branded parts. The plaintiffs challenged Harley’s two-year limited warranty, which warned that using independent repair shops or aftermarket parts could lead to denied claims, arguing that this creates an illegal tying arrangement that locks Harley owners into its aftermarket ecosystem at premium prices. Harley maintained it only excludes coverage for defects caused by non-Harley parts.
The Northern District of Illinois dismissed the consolidated class action, holding that Harley’s warranty terms do not violate the Magnuson-Moss Warranty Act or antitrust law, prompting the plaintiffs to appeal to the U.S. Court of Appeals for the Seventh Circuit.
On August 15, the Seventh Circuit affirmed the lower court’s dismissal, holding that Harley’s warranty does not require consumers to use Harley parts; it simply excludes coverage when non-Harley parts cause a defect. That distinction, while subtle, was enough for Harley to prevail. The majority emphasized that Harley lacks the kind of market dominance necessary to sustain an antitrust claim, and that the warranty language is available to buyers at the point of sale, which undercut plaintiffs’ claims that they were unfairly “locked in” after purchase.
A dissenting judge, however, flagged that the language in Harley’s owner’s manual could reasonably be read as conditioning warranty coverage on Harley-only servicing – a reminder that close calls on warranty drafting can – and do – matter.
More than Merely a Motorcycle Story
While the case centers on Harleys; it is not just a motorcycle story. The decision sits squarely within a broader debate about how companies in consumer, luxury, and tech sectors use warranties to shape aftermarket behavior. Watches provide perhaps the closest analogue. Major Swiss houses routinely warn that servicing outside their authorized networks voids warranty coverage and may diminish the value of the watch. The rationale is brand protection: maintaining quality, safeguarding against counterfeits, and preserving resale value. But the Harley ruling underscores that the law permits only one narrow move – denying coverage when a third-party repair actually causes damage. It does not allow brands to make coverage contingent on exclusive use of their own parts or services.
For watchmakers, this is particularly fraught. The economics of luxury watch ownership is defined by servicing, which can cost thousands of dollars and often requires sending the watch back to Geneva or an exclusive service hub. That creates the very kind of aftermarket lock-in that antitrust law scrutinizes. In Harley, the court dismissed a Kodak-style lock-in claim on the basis that warranty terms were disclosed before purchase and that switching costs were manageable. But in the watch world, where resale value, authenticity guarantees, and consumer psychology heighten dependence on brand-controlled servicing, regulators could be less forgiving.
The Federal Trade Commission is already paying attention. Harley-Davidson entered into a consent decree with the regulator in 2022 over restrictive warranty terms. The FTC has also warned consumer products companies more broadly that “warranty void if used with unauthorized parts” provisions violate federal law. That message carries obvious implications for luxury categories where brand value rests on exclusivity and tight control over after-sale markets.
A Warning Shot
What emerges is a cautionary tale for fashion and luxury groups, particularly those with scale and market power. Brands under the umbrella of conglomerates like LVMH or Richemont may be tempted to draft warranties that effectively tether consumers to in-house service centers or parts. But the Harley ruling highlights the limits of that strategy. The safe harbor is narrow: brands may disclaim coverage for damage caused by unauthorized work, but they may not categorically void coverage based on where a product is serviced or what components are used.
The lesson for legal and compliance teams is relatively straightforward. Warranty language must be precise, conspicuous, and causation-based. Phrases like “use only genuine parts” or “warranty void if serviced elsewhere” invite scrutiny. The better course is to state that the warranty does not cover damage caused by non-genuine parts or unauthorized servicing. Even then, brands with significant market share should be mindful that aggressive warranty structures may bolster antitrust theories that regulators or private plaintiffs are eager to test.
The Harley case confirms that warranties can serve as legitimate tools of brand protection, but they cannot be transformed into levers of aftermarket control. For companies in fashion, watches, and jewelry, the line between the two is thinner than it looks – and missteps carry not only reputational but regulatory risk.
The case is In Re: Harley-Davidson Aftermarket Parts Marketing, Sales Practices and Antitrust Litigation, 24-2111 (7th Cir.).
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