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Staples and HP accused in federal lawsuit
BOSTON, Dec 07 – A U.S. man sued office-products retailer Staples Inc and printer manufacturer Hewlett-Packard Co in federal court on Monday, charging they broke antitrust laws in collaborating on the sale of replacement ink-jet printer cartridges.In a lawsuit filed in U.S. District Court in Boston, Ranjit Bedi charged that the two companies had reached “an illegal agreement between competitors to stop competing” when HP paid Staples, the biggest U.S. specialty retailer of office supplies, “market development funds” to stop selling non-HP-branded ink-jet printer cartridges for HP printers.The suit contends that HP, the world’s largest personal computer maker, paid Staples more than $100 million to stop selling lower-priced printer cartridges for HP printers. The suit does not make clear how Bedi, of Pacific Palisades, California, determined the $100 million number.The suit, which seeks class-action status, claims that the actions violated the Sherman Act and Clayton Act, which prohibit noncompetitive behavior. It seeks unspecified money damages and asks the court to stop HP and Staples from engaging in noncompetitive acts.Spokesmen for Framingham, Massachusetts-based Staples and Palo Alto, California-based HP both said their companies had not yet seen the suit and declined further comment.
$8,000-per-gallon printer ink leads to antitrust lawsuit
A Boston man has filed a class-action lawsuit accusing hardware maker HP and office supply retailer Staples of colluding to inflate the price of printer ink cartridges in violation of federal antitrust law. According to the suit, HP allegedly paid Staples $100 million to refrain from selling inexpensive third-party ink cartridges, although the suit doesn’t make it clear how plaintiff Ranjit Bedi arrived at that figure.For most printer companies, ink is the bread and butter of their business. The price of ink for HP ink-jet printers can be as much as $8,000 per gallon, a figure that makes gas-pump price gouging look tame. HP is currently the dominant company in the printing market, and a considerable portion of the company’s profits come from ink.The printer makers have been waging an all-out war against third-party vendors that sell replacement cartridges at a fraction of the price. The tactics employed by the printer makers to maintain monopoly control over ink distribution for their printing products have become increasingly aggressive. In the past, we have seen HP, Epson, Lenovo and other companies attempt to use patents and even the Digital Millennium Copyright Act in their efforts to crush third-party ink distributors.The companies have also turned to using the ink equivalent of DRM, the use of microchips embedded in ink cartridges that work with a corresponding technical mechanism in the printer that blocks the use of unauthorized third-party ink. Adding insult to injury, most printers are lying, filthy ink thieves, according to a recent study, misreporting that they are low on ink when they are not.Bedi’s suit asks for unspecified damages and an injunction barring the two companies from engaging in anticompetitive business practices.
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