EU to investigate ink pricing

The EU is to investigate allegations of anti-competitive practices by leading printer makers, following complaints that users are being overcharged for ink cartridges.

The worldwide market for printers and ink and toner cartridges is dominated by four companies: Canon, Epson, Lexmark and Hewlett-Packard. The vendors make most of their profits in this market from disposable cartridges, whilst making next to nothing on the printers. You can currently buy an Epson Stylus C60 printer for around £69 - and that includes one black and one colour ink cartridge. Replacements for these cost £22 and £20 respectively.

The manufacturers have encouraged consumers to buy replacement cartridges supplied by themselves, rather than 'unbranded' cartridges from third-parties. Some have suggested that the use of third-party supplies may result in inferior quality prints and in some cases damage to the printers.

For example, Epson's Setup and daily Use guide for the Stylus Color 740 says, 'EPSON recommends the use of genuine EPSON ink cartridges. Other products not manufactured by EPSON may cause damage to your printer not covered by EPSON's
warranties.'

Nonetheless, third parties have gradually eroded the printer manufacturers' market share, largely by refilling the original cartridges for a fraction of the price. According to the Financial Times some estimates put their market share at around 11 per cent, worth some $3 billion.

Under EU law, companies cannot exploit a strong market position to restrict competition. European competition commissioner Mario Monti raised the issue this week with US anti-trust regulator Charles James and has concluded that there is, 'probably a case here for us. We intend to examine this in detail.' The EU can fine companies up to 10 per cent of their turnover if it finds them guilty of anti-competitive practices.

Hewlett-Packard has already denied any wrongdoing. A spokesman said, 'HP does not prevent customers from using cartridges from other suppliers.'