Suit: HP Gouges Inkjet Users

October 17, 2001

Hewlett-Packard • Computers • Printers • Scanners • Cameras • Inkjets • Rebates --- News • HP Introduces 'Touchy-Feely' PC • Class Action Challenges HP's Inkjet Replacement Warnings • HP Wins An Inkjet Suit • Inkjet Suit Filed --- • Consumer: Blame Thyself!

A class action suit against Hewlett-Packard Co. charges the company with illegally monopolizing the inkjet business and seeks more than $1 billion in consumer rebates. If plaintiff Ronald Jones of Palo Alto, CA, gets his way, every consumer who purchased an HP inkjet cartridge since 1995 will get a rebate.

While HP has fought off numerous inkjet-related suits from competitors, this is the first major consumer class action to challenge HP's practice of requiring consumers to buy a new print head every time they need ink.

Industry analysts say that by "tying" ink refills to print head purchases, HP is able to charge about $30 for ink cartridges that would otherwise cost less than $10. It's a highly profitable business for HP, which reports that printer supplies have generated nearly 40 percent of corporate profits in recent years.

"HP is conspiring against the consumer," Jones argues. He says consumers could choose competing products with lower-cost ink supplies if they were more fully aware of the longterm cost of inkjet cartridges. He notes that the cost of inkjet cartridges continues to rise while printer prices fall.

• Planned Obsolesence Comes to Ink Cartridges • Class Action Challenges HP's Inkjet Replacement Warnings • H-P Wins Inkjet Suit • Big Blot for Inkjet Resellers • Suit: HP Gouges Inkjet Users --- Consumer Complaints • 123inkjets.com • Dell • HP

Each new inkjet cartridge a consumer buys contains not only a fresh supply of ink but also a new print head. While each cartridge contains roughly enough ink to print between 400 and 1,000 pages, most print heads are capable of printing up to 12,000 pages. But since there's no easy way to refill the cartridges, consumers have few alternatives, Jones argues.

Courts have upheld the right of consumers to refill the cartridges as well as the right of companies to sell refill kits. But since there's no refill cap, the process involves using a syringe to inject ink into the cartridge, a messy and unappealing process.

HP's main competitors, Epson, Canon of Xerox, also make inkjet products, most of which use separate ink containers and print heads.

Jones' suit is pending in the state Superior Court in San Francisco, alleging that HP has violated California's Cartwright Natiturst Act by conspiring to restrain trade in the inkjet marketplace. In March 2000, the court certified the case as a class action in California and 18 other states, including New York and Illinois.

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