• 05 02 2016 429716a-cig-clearchoice-banner-902x177
  • 4toner4
  • 7035-overstock-banner-902x177
  • big-banner-ad_2-sean
  • cartridgewebsite-com-big-banner-02-09-07-2016
  • Print
  • 2toner1-2
  • Video and Film
  • mse-big-banner-new-03-17-2016-416716a-tonernews-web-banner-mse-212
  • mse-big-new-banner-03-17-2016-416616a-tonernews-web-banner-mse-114


 user 2007-12-21 at 3:12:00 pm Views: 34
  • #18877

    HP, Staples Lawsuit Shows Cutthroat Competition
    relationships between major vendors such as Hewlett-Packard  and big
    box retailers like Staples, vendors continuously push for preferential
    selling agreements like that described in a lawsuit alleging the
    companies conspired on the sale of replacement ink-jet print
    cartridges, an industry analyst said.The antitrust lawsuit, filed in
    U.S. District Court in Boston, alleges HP and Staples enacted an “an
    illegal agreement between competitors to stop competing” in which HP
    paid Staples market development funds to stop selling non-HP-branded
    ink-jet printer cartridges for HP printers.The suit, filed by a Pacific
    Palisades, Calif. resident named Ranjit Bedi, said HP paid Staples more
    than $100 million in market development funds to sell HP cartridges and
    to stop selling lower-priced cartridges.However, Andy Lippman, an
    industry analyst for ink-jet cartridge markets for Lyra Research, a
    Newtonville, Mass., research and consulting company, said jockeying for
    position occurs frequently in the intensely competitive, $30 billion,
    ink-jet cartridge market.Lippman said the practice was not necessarily
    illegal. “The whole business market for HP and other printer
    manufacturers is to lock the consumer into buying the products from the
    manufacturers,” Lippman said. “There is a constant struggle. It’s not
    just HP, but all the manufacturers are doing their best to sell these
    ink-jet cartridges.”HP released a statement earlier this week denying
    the claims of the lawsuit. “HP denies that it has engaged in any
    anticompetitive conduct,” the statement said. “HP is confident,
    therefore, that after the relevant facts are presented to the judge it
    will be determined that our business relationship with Staples has been
    and is entirely proper.” Staples said it will have no comment while it
    reviews the lawsuit.

    Other leading ink jet replacement cartridge
    manufacturers, including Epson, Canon  and Lexmark, could not be
    reached for comment.Staples at one time sold its own brand of
    replaceable printer cartridges, which competed with HP’s, Lippman said.
    HP asked Staples to use the HP brand instead.”HP, which is the big
    partner with Staples, told Staples they were not being treated fairly,”
    Lippman said. “HP said to Staples, ‘We provide you with a lot of good
    products, but you are selling your own brand of products and taking
    revenue from us.’ Staples was selling cartridges a couple of dollars
    cheaper and putting it next to the HP brand. It’s an obvious choice to
    go with the cheaper product.”Lippman said the amount of money listed in
    the lawsuit to describe the market development funds provided to
    Staples in the agreement appeared accurate. “We also heard it was $100
    million,” he said. “We think HP gave Staples a couple of percentage
    points of profit on the cartridges as well. So Staples gets a cut
    whenever they sell them.”Lippman said such agreements may not
    necessarily use the term “market development funds” to describe
    payments. “A lot of money is exchanged in what are called ‘shelving
    fees.’ To get a key shelf or kiosk, you have to pay,” he said. “It’s
    easy for HP to say, ‘We decided to pay for the space.”‘

    not all customers are happy that Staples cartridges are replaced with
    HP products, Lippman said. “Staples told the public, ‘We are going to
    stop selling our own brand of cartridges, but you get a better quality
    of cartridge from HP,”’ Lippman explained. “A lot of customers would
    say, ‘We save money on the Stapes product and will go to another office
    supply store or online to make the purchase.”’ Some HP partners said
    the actions would depress printer cartridges, making it difficult for
    them to compete.”I wouldn’t be surprised a bit [if the lawsuit claims
    were true],” said Jay Tipton, vice president of business solutions for
    Technology Specialists, Fort Wayne, Ind., an HP partner. “That is how
    big box retailers can make their money [selling products like printer
    supplies], by sometimes selling at ridiculously low prices. I can’t
    beat those prices. The only way I can make money is through services.
    In turn, Staples probably has an agreement with HP to sell a certain
    amounts of cartridges.”