Even HP resellers thought the price of toner and ink was too high – so HP India facilitated an illegal cartel

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Regulator fines PC and printer giant for rigged tender bids and collusion

The Competition Commission of India (CCI) has fined HP Inc. and some of its resellers, for what it calls “cartelisation” activities that inflated the cost of PCs and printers – and which it says HP used to head off threats from resellers to sell counterfeit ink cartridges.The ₹138.85 crores/$14.4 million fine won’t be a massive inconvenience to HP.The facts of the case may be, as the CCI found HP told its resellers what prices to charge when they bid for tenders posted to a government procurement site. The PC and printer giant also prohibited some of its resellers from bidding on tenders.

In its order related to HP’s bids to sell printer supplies, the regulator reveals it accessed WhatsApp records that show HP staff and some of its resellers “were operating in a collusive arrangement and shows the practice of bid rigging including cover bidding, price fixation, and customer allocation, during 2017-2020.”

Cover bidding is the practice of having one reseller make a ridiculously high bid that a vendor knows won’t win a deal, in the hope other resellers who offer more reasonable quotes will get the sale. The order also claims that HP would decide in advance which of its resellers would sell to which customer.The CCI found that one of HP’s motives was to ensure that it remained competitive with other PC and printer makers, rather than to favor a particular reseller.Another motive was to stop resellers from selling counterfeit ink and toner.