HP fined 1.4 billion rupees for “cartelization” of ink cartridges, toner, PCs

Resellers threatened to ditch HP printing supplies for counterfeits.

The Indian government has fined HP India and its partners a total of 1.4 billion rupees (about $14.4 million) for working with reseller partners in the “cartelization” of computers, ink cartridges, and toner. The Competition Commission of India (CCI) said this week that it found HP India had colluded with some channel partners to drive up the cost of bids for government contracts for computers, as well as for selling ink cartridges, toner, and other printing supplies, including graphic and digital manufacturing supplies. It said that HP was aiming to outcompete other OEMs and discourage resellers from selling “counterfeit” ink and toner.

In an order, the CCI said that HP India worked with five resellers to coordinate their bid prices for government contracts to increase the chances of an HP partner winning the contracts. The company was fined 1.3 billion rupees (about $13.1 million). The order reads: [C]ertain resellers approached HP India to help facilitate an arrangement that would enhance their chances of securing Government supply contracts against other competing HP India resellers.

These requests included: (a) restricting participation of resellers from other territories in local tenders; (b) seeking support in dividing the accounts/relevant tenders amongst themselves; (c) restricting the number of MAFs [manufacturer’s authorization forms] issued to other resellers or to issue MAFs to some designated resellers only; (d) addressing instances where bid prices offered by other resellers were below the [Government e Marketplace, India’s online procurement platform] platform price or rate contract prices, through corrective action, and (e) facilitating “cover” bids. HP was also fined 119.8 million rupees (about $1.2 million) for “indulging in cartelization in sale and supply of supplies products comprising of toner, cartridges, and other consumable used with print hardware products,” CCI said in its announcement.