HP India received a $14.4 million fine after being involved in “cartelization” practices
The cartel leader of ink cartridges and toner.
- HP India was fined about $14.4 million for coordinating bids and prices on government supply contracts.
- India’s competition regulator said HP India worked with five resellers to help its partners win contracts.
- The case involved computers, printing supplies, accessories, and alleged bid rigging between 2017 and 2020.
- The fines highlight concerns that price fixing can raise public costs and reduce fair competition in government procurement.
Key Takeaways by nexos.ai, reviewed by Cybernews staff.
HP India received a 1.4 billion rupee (about $14.4 million) fine after it was revealed that the company was involved in a “cartelization” process.
Together with five of its partners, the company made sure to raise the prices of bids for government contracts for products such as computers, notebooks, printing supplies, including cartridges and toners, as well as accessories, such as desktops and keyboards.
Cartelization is a manipulation tactic in which competing companies work to rig the market by fixing prices, limiting product availability, or dividing the market to eliminate competition.
According to the Competition Commission of India (CCI), HP sought to increase its partners' chances of winning contracts and surpass its opponents. As a result, the company was fined 1.3 billion rupees (about $13.1 million).
“[...] Certain 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,” the CCI released document read.
In an order, the CCI said that HP India worked with five resellers to coordinate bid prices for government contracts to increase the chances of an HP partner winning them.
The company was fined an additional 119.8 million rupees (around $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,” the Commission revealed.
Besides HP India, 21 of its resellers also received fines totaling 35.2 million rupees (around $365,335), Ars Technica reported.
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Another document revealed that the company “and its Tier-2 resellers
were operating in a collusive arrangement, and showed the practice of bid rigging
including cover bidding, price fixation, and customer allocation, during 2017-2020.”
Because of the “pressure on pricing,” some resellers felt threatened to “shift to low-cost counterfeit products to compete on price.”
The company has already been in the spotlight for its printer services, as HP blocks third-party ink in its printers via firmware updates.
At least that’s what happened to the HP printer owner who learned she couldn’t use her device because she refused to pay for the subscription required to keep her equipment working.
