Tag: HP

Company Check : HP Fined Over Government Tender Rigging

Posted on by Paul Stradling

HP India has been fined almost 1.39 billion Indian rupees (around £12 million) by India’s Competition Commission after a lengthy investigation concluded that it coordinated with resellers to manipulate bidding in government technology procurement, in one of the most significant competition law cases involving the IT sector in recent years.

What Happened?

The penalties arise from two separate investigations covering personal computing equipment and printer consumables sold through India’s Government e-Marketplace (GeM), the country’s central online procurement platform for public sector purchasing. India’s regulator concluded that HP and a number of authorised resellers worked together in ways that undermined genuine competition during public tenders, resulting in combined penalties of approximately 1.3885 billion rupees.

What Did The Investigation Find?

The larger of the two cases focused on laptops, desktops, workstations, notebooks, point-of-sale systems and related accessories supplied through GeM. The Competition Commission began investigating after HP itself applied for leniency under India’s competition laws, admitting that anti-competitive arrangements had taken place and providing evidence to investigators.

Investigators examined dozens of government tenders before identifying seven major procurements where they found evidence that HP and selected resellers had coordinated their activities. According to the Commission, this coordination included deciding which reseller should have the strongest chance of winning particular contracts, arranging “cover bids” from other partners to create the appearance of competition, influencing bid prices and controlling which resellers received the Manufacturer’s Authorisation Forms (MAFs) needed to participate in tenders.

The Commission concluded that HP was not simply responding to requests from resellers but had become actively involved in facilitating these arrangements.

As the order states: “The coordination amongst HP India’s reseller was accordingly designed to ensure that at least one HP reseller remained present in the final round.”

Evidence relied upon by investigators included internal emails, witness statements, WhatsApp conversations and other communications exchanged between HP employees and reseller organisations.

Why Did It Happen?

The Commission’s findings essentially reveal that the behaviour developed during the transition from India’s older government procurement arrangements to the newer GeM platform.

For example, before GeM was introduced, many resellers had built long-standing relationships with particular government departments. Under the new system, suppliers across India could compete much more easily for the same contracts, increasing price competition and making it harder for established partners to protect their existing business.

According to HP’s own submissions, resellers asked the company to help preserve these legacy customer relationships by limiting competition between HP partners. The requests included restricting which resellers received Manufacturer’s Authorisation Forms (MAFs), allocating particular accounts to preferred partners and facilitating support bids where other resellers would deliberately submit non-competitive quotations.

HP argued that it was attempting to manage commercial pressures created by the new procurement system and that competition from other manufacturers such as Dell, Acer and Lenovo remained strong. It also maintained that any coordination only affected competition between HP resellers rather than competition across the wider market. However, clearly, the Competition Commission wasn’t persuaded by HP’s arguments.

The Second Investigation

Going from bad to worse for HP, alongside the personal systems case, the Commission also investigated HP’s sale of printer consumables, including ink cartridges and toner supplies.

Investigators concluded that similar anti-competitive practices had taken place in government tenders for printing supplies, leading to a further penalty of approximately 119.8 million rupees (about £923,000). Together, the two decisions resulted in total penalties approaching 1.39 billion rupees (about £10.7 million), with additional fines imposed on participating reseller companies and several individuals involved in the conduct.

Although HP received substantial reductions under India’s leniency programme because it voluntarily disclosed the conduct and cooperated throughout the investigation, the regulator still considered the company’s role sufficiently serious to justify one of the largest competition penalties imposed on an IT manufacturer in India.

Why This Matters Beyond India

While the case concerns India’s procurement system, the underlying issues are very relevant to manufacturers and channel partners worldwide.

For example, most technology vendors rely on networks of distributors and authorised resellers. Those relationships naturally involve discussions about pricing, product availability, technical specifications and manufacturer approvals. None of those activities are inherently problematic.

However, the risk arises when those conversations begin influencing who should bid, what prices should be quoted or which partners should deliberately avoid competing. At that point, legitimate channel management can cross into anti-competitive behaviour.

One particularly interesting aspect of the case involves Manufacturer’s Authorisation Forms. These documents exist for good reasons, helping purchasers verify that products are genuine and supported by the manufacturer. However, the Commission found that selectively issuing or withholding those authorisations became one mechanism for controlling competition between resellers rather than simply protecting customers from counterfeit products.

What Does This Mean For Your Business?

For organisations buying technology, the decision serves as a reminder that procurement platforms alone can’t guarantee competitive markets if suppliers coordinate behind the scenes.

For technology manufacturers, distributors and resellers, the message is even clearer. Competition authorities are increasingly willing to examine communications between channel partners in detail, looking beyond formal contracts to understand how bidding decisions are actually made.

Internal emails, messaging platforms and routine commercial discussions can all become evidence if they reveal attempts to coordinate pricing, allocate customers or influence tender outcomes.

Businesses operating partner programmes should therefore ensure that their competition law compliance extends beyond formal policies. Sales teams, account managers and channel partners all need clear guidance on where legitimate commercial co-operation ends and unlawful co-ordination begins, because, as this case demonstrates, the financial and reputational consequences of crossing that line can be substantial.

Company Check – HP’s Toner-Blocking Settlement

Posted on by Paul Stradling

HP has (quietly) settled a class action lawsuit over claims it deliberately blocked customers from using third-party toner cartridges in its printers, without paying a penny in damages.

Locking Out Third-Party Toner

The lawsuit centred on HP’s controversial Dynamic Security feature, i.e. software designed to detect and reject toner cartridges not produced by HP itself. The system, enabled through automatic firmware updates, left some users unable to print at all if they’d chosen cheaper, third-party alternatives.

The lead plaintiffs included Mobile Emergency Housing Corp (MEHC), a US-based organisation providing emergency shelter services, and Performance Automotive, a car parts business. Both reported that HP printers they had purchased in good faith suddenly stopped accepting non-HP toner after a firmware update was remotely triggered. For example:

– MEHC said it had bought an HP Color LaserJet Pro M254 in 2019 and opted for third-party toner in 2020 to cut costs. The following month, a firmware update rendered the cartridges useless.

– Performance Automotive said it had a similar experience with its HP Color LaserJet Pro MFP M281fdw after installing an update that blocked non-HP supplies.

A Profitable Strategy?

It seems that HP hasn’t denied the existence of Dynamic Security. In fact, it appears to have defended the system openly. For example, speaking back at the 2024 World Economic Forum in Davos, CEO Enrique Lores highlighted how HP’s business model depends on profits from consumables, not hardware, saying: “We lose money on the hardware, we make money on the supplies,” and that, “we’re investing in that customer every time a printer is sold.”

The fact that in FY2024, HP’s printing division generated $4.5 billion in net revenue, much of it from proprietary ink and toner sales, appears to support this idea.

Lores has also argued that Dynamic Security helps protect customers from potential security threats, claiming third-party cartridges could, in theory, carry malicious firmware. However, such risks remain hypothetical and there’s little evidence of this happening in real-world scenarios.

Settlement Without Liability

Rather than fight the lawsuit in court, HP has now agreed to settle without admitting wrongdoing. Under the terms, the company will continue to disclose that its printers may block third-party cartridges and has pledged to allow customers the choice to install or decline firmware updates containing Dynamic Security.

“HP denies that it did anything wrong,” the official settlement notice states, “but agrees to maintain certain disclosures and options regarding firmware updates.”

While it appears that no compensation will be paid, the agreement marks another chapter in HP’s ongoing efforts to defend its closed ecosystem, even as it comes under increasing scrutiny from customers and regulators alike.

The Growing Backlash Against Lock-In

Unfortunately for HP, this issue isn’t likely to go away. Many customers see the lockout as an unfair restriction, especially when third-party cartridges can cost a fraction of the price. On forums and social media, frustrated users have voiced concerns about being forced into costly purchases with little warning or transparency.

For businesses that rely on predictable print costs, these kinds of restrictions can have real operational impacts. For example:

– Disruption risk. Sudden firmware changes can halt printing workflows, causing downtime for organisations.

– Cost inflation. HP-branded toner is often significantly more expensive, impacting budgets for schools, small businesses, and non-profits.

– Reduced trust. Customers may question whether HP prioritises their interests, or simply its bottom line.

HP’s Not The Only One

It’s worth noting here, however, that HP’s not alone in exploring this kind of supply-chain lock-in. Other printer makers, including Canon and Epson, have also been accused of using software to prevent third-party cartridges from functioning.

However, HP has become one of the most visible examples, perhaps because it’s also one of the most vocal. With lawsuits, user complaints, and increasing regulatory scrutiny in both the US and EU, it seems that efforts to tightly control consumables may be backfiring.

A 2023 report by the European Commission warned that such tactics could breach consumer rights, and several EU countries are now pushing for regulations guaranteeing “the right to repair” and “freedom of choice” for printer supplies.

HP, meanwhile, remains firm on its stance, offering its own cartridge recycling programmes and claiming that its proprietary ecosystem is ultimately more sustainable and secure.

That said, for many customers, particularly in sectors where budgets are tight, that argument is proving increasingly hard to justify.

What Does This Mean For Your Business?

HP’s settlement may avoid an outright legal defeat but is likely to leave lingering concerns for businesses that rely on its printers. The company’s willingness to restrict functionality through remote updates (especially without warning) appears to raise serious questions about control, transparency, and long-term value.

While HP has pledged to give users the choice over future firmware updates, the incident highlights the risks of buying into ecosystems that can be altered unilaterally. For small businesses, charities, schools, and other organisations with tight margins, the ability to use affordable third-party toner isn’t just a preference but is a necessity.

It’s also a warning sign for procurement teams, i.e. printer selection should no longer be just about hardware specs or upfront cost. It’s about understanding how restrictive the vendor’s software policies are, and what support (or surprises) may lie ahead.

If anything, this case shows how vendors are doubling down on closed-loop business models. Companies may want to reassess whether HP’s approach aligns with their operational and financial priorities, or if a more open, flexible printing solution would be the smarter investment.

As printer manufacturers continue to balance profit protection with customer satisfaction, the pressure is on to prove that these digital lock-ins serve users as well as shareholders.

Company Check – HP’s Deliberate 15-Minute Call-Wait Outcry

Posted on by Paul Stradling

HP has come under scrutiny for implementing a policy that enforced a minimum 15-minute wait time for customers seeking telephone support for consumer PCs and printers.

Frustration

The move, which was (quietly) introduced earlier this year, was designed to push customers towards self-service digital support options, but it has triggered frustration among users and raised concerns about customer service standards.

Internal Memo Reveals Strategic Delay

An internal HP memo, which was leaked to the press, appears to show that the 15-minute call delay was intentional. The document stated that the company wanted to “influence customers to increase their adoption of digital self-solve” and “generate warranty cost efficiencies.”

The changed policy affected customers in the UK, Ireland, France, Germany, and Italy, with HP’s phone system informing callers of the extended wait time before redirecting them to HP’s online support tools, such as its website and virtual assistant. The idea was to encourage users to find answers themselves rather than immediately resorting to human customer service.

Customer Backlash and Internal Dissent

However, unfortunately for HP, its decision didn’t go unnoticed. Customers quickly voiced their frustration, arguing that a forced waiting period was an unreasonable tactic to discourage live support requests. Many took to social media and consumer forums, questioning why a major tech company would deliberately delay assistance.

Internally, the policy was reportedly not well received by HP employees either. It’s been reported that sources within the company suggested that frontline staff had no direct involvement in the decision, leaving them to handle complaints from disgruntled customers without a clear justification.

U-Turn After Widespread Criticism

Facing significant backlash, HP reversed the 15-minute waiting policy within weeks of its implementation. The company issued a statement clarifying that the move was meant to encourage digital solutions and reduce enquiry resolution times, but it acknowledged that customer expectations were not met.

“We are committed to delivering an exceptional customer experience and have listened to our customers’ feedback,” HP said. The company assured users that they would no longer experience artificial delays when calling for support.

Part of a Shift From Traditional Customer Service Models?

For businesses that rely on HP devices, the brief but controversial policy raises important questions about customer support access and service reliability. While HP may have abandoned the delay, the incident highlights an ongoing industry trend of shifting away from traditional customer service models. For example:

– Operational efficiency at risk. Businesses that rely on quick resolutions for IT issues could face significant disruptions if similar policies are reintroduced.

– Rising costs and productivity loss. Longer wait times for technical support translate to delayed troubleshooting, which can impact productivity and profitability.

– Trust and vendor loyalty. Companies may start re-evaluating their relationship with HP, particularly if competitors offer more accessible customer support.

A Growing Industry Trend

HP doesn’t appear to be alone in pushing customers towards digital self-service. For example, many technology companies are investing in AI-powered chatbots and automated support to cut costs. Some firms have even implemented fees for live customer support, reinforcing the idea that human assistance is becoming a premium service.

However, the balance between automation and accessibility remains a concern. A recent Gartner report suggests that consumer protection laws in the EU may soon mandate a “right to human support” to prevent companies from making digital-only assistance the default option.

What Does This Mean For Your Business?

HP’s brief experiment with forced waiting times may have ended, but it appears to have left some lingering concerns over how major tech firms balance cost-cutting with customer care. It seems that businesses should, therefore, remain cautious about future shifts in HP’s support strategy, as the company’s willingness to experiment with such measures suggests a broader trend towards digital-first service models.

While automation can streamline some processes (and cut costs), the need for live support remains critical, particularly in high-stakes business environments where downtime can be costly. Companies should evaluate whether HP’s evolving approach aligns with their operational needs or if alternative vendors offer more reliable support.

At the same time, HP and other industry leaders should probably recognise that restricting access to human assistance could drive customers towards competitors who offer direct service rather than cost-saving efficiencies. The growing tension between digital automation and consumer expectations suggests that future policies will need to strike a careful balance or risk further alienating business customers.

As customer expectations continue to evolve, businesses must be prepared to advocate for accessible and reliable support services, whether from HP or any other technology provider.

Featured Article : A Big Stink About Ink

Posted on by Paul Stradling

After trying to dismiss a lawsuit from HP customers angry at a firmware update (meaning that their HP printers wouldn’t work with third-party ink cartridges), we look at how HP is answering the arguments within the antitrust ink cartridge lawsuit and what the implications could be for customers.

The Lawsuit

Back in January, printing premier HP was sued in a Federal court in Chicago by 11 consumers (a class action lawsuit) who claimed that their HP printers wouldn’t accept replacement ink cartridges made by other manufacturers, thereby forcing them to pay artificially high prices for HP-branded cartridges. The lawsuit accused HP of violating US and state antitrust laws in a bid to monopolise the market for replacement ink.

The plaintiffs allege that they weren’t told that automatic software updates (firmware updates between late 2022 and early 2023) from HP would disable some printers unless HP-branded ink was used and that faced with non-functional printers, they were then forced to purchase more expensive HP-branded ink that they would not otherwise have purchased.

Damages

The plaintiffs, in this case, are seeking damages of greater than $5 million from HP, which include the cost of their useless third-party cartridges (the ones that won’t work in their printers because of the firmware update) as well as an injunction to disable the part of the firmware updates that prevent the usage of third-party ink.

Trying To Get IT Dismissed

HP’s lawyers recently attempted to have all 79 causes of action in the lawsuit dismissed on the grounds that the central premise of the Plaintiffs’ case was wrong, i.e. that HP failed to disclose to consumers that their printers were equipped with “dynamic security” measures designed to prevent the use of third-party printer cartridges that copy HP’s security chips, thereby locking them into an aftermarket where they were overcharged.

HP argued that it goes to great lengths to disclose that its printers are intended to work only with cartridges that “have an HP chip, and that they may not work with third-party cartridges that do not have an HP chip.” HP also argued that “this information is displayed in clear terms on the printer box, on HP’s website, and in many other materials.” It also highlighted that “many third-party cartridges are not affected by dynamic security. HP does not block cartridges that reuse HP security chips, and there are many such options available for sale. Nor does HP conceal its use of dynamic security.”

HP’s lawyers additionally argued that the plaintiffs also didn’t allege that they didn’t authorise firmware updates in their printers and that many plaintiffs also claim that they purchased HP-branded ink cartridges after receiving the software or firmware updates, and that their printers began to again function properly.

In short, HP’s lawyers attempted to find a long list of reasons to have the lawsuit dismissed.

Previously

These types of allegations against HP have gone on for some time now. For example, back in 2019, HP agreed to resolve related consumer claims in a California case, for a $1.5 million payment, without admitting any wrongdoing (as part of the settlement). However, just last year (in California) a judge said that HP must at least face some claims that it designed some all-in-one printers to stop scanning and faxing when the machine was low on ink, thereby forcing consumers to buy cartridges.

The Backdrop

All these antitrust printing arguments are taking place at a time when HP has been through a long period of shrinking revenues, mainly due to enterprise customers affected by the uncertain economic environment, holding off on their hardware purchases a bit longer.

Instant In Subscription & All-in-One service

Following a strategy re-think, two solutions that HP has devised to help it through these difficult times are its ‘Instant Ink’ services and its All-in-One service, both of which see it focusing on a subscription model going forward.

HP’s Instant Ink service is a subscription-based model that is beneficial for users who want to avoid the inconvenience of running out of ink and dealing with last-minute replacements. It also helps in managing printing costs more predictably. With Instant Ink (for a monthly fee, on an agreed plan), the HP printer’s ability to monitor ink levels means that before users’ ink runs low, HP sends replacement cartridges directly to the doorstep. HP claimed to have 13 million sign-ups to the service back in the beginning of March.

As the name suggests, The All-in-One service, which launched in the US last month, includes not just the ink but hardware as well, i.e. the HP Envy or HP OfficeJet models. This is also a two-year subscription contract, based on a printed page plan, with cancellation fees (to raise the barriers to exit).

In addition to trying to reduce its costs, HP’s CEO, Enrique Lores, speaking recently at the Morgan Stanley Technology, Media and Telecom conference outlined HP’s strategy since the 2019 rethink as trying to “protect supplies revenue by upping subscription services, selling hardware loaded with ink, smart models, and charging more for printers when a customer isn’t committing to HP ink.”

AI Apps Too

HP is also hoping that AI will boost PC sales and has indicated that alongside its PCs, it’s developing new AI applications to run on top of its installed base of more than 200 million commercial devices.

Printing Declining Anyway

Despite HP’s court battles over printer ink and its move to a subscription-based model, for many businesses, the need (and demand) for printers and ink has declined in recent years. This has been due to factors like the greater proliferation of digital tools and technologies, advancements in cloud computing and software-as-a-service (SaaS) platforms and businesses are moving towards greener practices (despite printer companies trying to produce more sustainable/greener ink). Also, the need to reduce costs has favoured digital storage over printed documents, alongside a disruption in global supply chains (e.g. for paper), plus the effects of the pandemic also meant a lowering of demand for printers and ink.

What Does This Mean For Your Business?

Having to constantly renew expensive ink cartridges or running out of ink at the wrong time have long been a significant cost and source of frustration to many businesses. In recent years, however, many businesses, for many of the reasons above, have updated to becoming more reliant on the cloud and digital solutions rather than printed documents. HP itself has had to change its strategy in 2019, moving customers to a subscription model for its ink and hardware in order to weather difficult economic times and falling demand.

This court case around HP’s attempt to curtail consumers’ adoption of cheaper third-party ink cartridges in favour of more expensive HP ones is likely to be unwelcome and reputationally damaging for HP at a time where it needs to protect its position in the marketplace. For competitors, HP’s dominance being challenged is good news and could provide a beneficial commercial outcome for them if events go the wrong way for HP.

For business customers who still need a printer, the ability to have trouble-free operation with their printers and to be able to benefit from the choice of using different, lower-priced print cartridge alternatives are likely to be valuable. Most of us will understand the frustration that printer ink problems can cause.

Looking ahead for HP, its cost-cutting and its shift to a subscription model for its ink/printer products, plus the promise of developing AI apps for its large installed base of commercial devices are ways it hopes to turn around the declining revenues of challenges of recent years. The company has a trusted business brand and the hope for HP is that their valuable brand won’t be tarnished too much by the outcome of the lawsuit that’s currently making the headlines.

Tech News : New Quantum Attack-Proof PCs

Posted on by Paul Stradling

At its Annual Partner Conference 2024, HP announced the world’s first business PCs to protect firmware against quantum computer attacks.

This Issue 

As highlighted by Global Risk Institute research, 27 per cent of experts think there is a 50 per cent likelihood of a cryptographically relevant quantum computer (CRQC) by 2033. HP says that “when that day comes, the security of existing digital signatures on firmware and software will be in question and digital trust will dissolve.” 

If quantum computers reach a point where they can crack our current cryptographic protections, the implications for businesses, societies, and individuals could be profound and wide-ranging. For example, the consequences could include:

– Massive data breaches and privacy loss, compromising everything from financial records to private communications.

– The undermining of financial systems, enabling unauthorised access to financial accounts, manipulation of transactions, and theft of funds. This, in turn, could erode trust in digital banking and financial systems, leading to widespread economic instability.

– National security communications being exposed, thereby compromising state secrets, military operations, plus critical infrastructure, potentially altering the balance of power on a global scale.

– Disruption of digital trust systems like digital signatures and SSL certificates, which underpin the security of online communications and commerce, thereby disrupting e-commerce, undermining the integrity of digital contracts, and eroding trust in online services.

New Cryptographic Standard? 

In response to these potential threats, the security community has been actively developing and standardising quantum-resistant cryptographic algorithms. These Post-Quantum Cryptography (PQC) algorithms aim to secure cryptographic systems against quantum attacks by relying on mathematical problems that are believed to be difficult for quantum computers to solve.

However, HP says that migrating our entire digital world to a new cryptographic standard is a huge undertaking and that while software can be updated, hardware can’t. This includes some of the cryptography that protects PC firmware. HP points out that “with no cryptographic protections in place, no device would be safe – attackers could access and modify the underlying firmware and gain total control.” 

HP’s Answer 

HP’s future-proofing answer is embedding protection against quantum computer hacks in PCs at the chip level via its 5th-generation ESC chip. By isolating the chip from the processor and OS, HP says the ESC provides a hardware platform that reduces the risk of data breaches and improves productivity by preventing downtime.

Start Now Says HP 

HP points out that with typical PC refresh cycles now every 3 to 5 years (and with the wider trend towards extending the life of hardware to improve sustainability), the migration to post-quantum cryptography should ideally start now. HP says that with its 2024 ESC upgrade, the hardware will be in place to protect PC firmware-integrity with Quantum-Resistant Cryptography, thereby delivering a secure foundation ahead of upgrades to software implementations of cryptography within PCs in the future.

What Does This Mean For Your Business? 

The potential of quantum computers being capable of breaking asymmetric cryptography is placing the entire digital world at an increasing risk. For UK businesses, this threat represents both a challenge and a call to action. Research suggests that the arrival of cryptographically relevant quantum computing is not a question of if, but when, with a significant number of experts anticipating its emergence by 2033. This reality necessitates a proactive approach to cybersecurity, particularly in safeguarding digital signatures on firmware and software that underpin the trust and integrity of our digital interactions and transactions.

Currently, the security community is responding by developing and standardising quantum-resistant cryptographic algorithms / Post-Quantum Cryptography (PQC) solutions. These could secure against both classical and quantum computing threats, thereby safeguarding digital assets and communications in the quantum era. However, as HP points out, transitioning our digital infrastructure to a new cryptographic standard is a potentially monumental task, complicated further by the limitations of hardware adaptation.

For UK businesses, this means that relying solely on software updates for future protection may be insufficient. Hardware (particularly PC firmware) that is less frequently updated and often overlooked in cybersecurity strategies, presents a critical vulnerability. This is why HP believes the introduction of the world’s first business PCs designed to protect firmware against quantum computer attacks is a significant development. HP’s idea of embedding protection at the chip level through its 5th generation ESC chip could offer businesses a solution that anticipates the quantum threat and addresses the challenges of hardware security at the same time.

HP also believes its approach of isolating the chip from the processor and operating system could create a more secure hardware platform. This idea may be particularly relevant for UK businesses, where the trend towards extending the lifecycle of hardware for sustainability purposes further exacerbates the vulnerability to future quantum attacks. With the threat apparently just a few years away, HP’s suggestion of starting the migration to quantum-resistant cryptographic solutions now, as part of the typical PC refresh cycle, sounds like it could be a sensible move for businesses.

In short, the message for UK businesses is that the threat of quantum computing to cybersecurity is real and approaching fast and preparing for this issue means adopting a holistic view of cybersecurity that includes both software and hardware considerations. Although HP’s new solution offers one potential answer to quantum threats, there will most likely be other innovative solutions offered by other companies in the near future and it will be a case of businesses choosing the one with the best fit for their individual needs and budget.