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HP & Staples Collude On $8,000/Gallon Ink?

Posted by kdawson on Wed Dec 19, 2007 09:08 AM
from the that's-no-razor-blade dept.
I Don't Believe in Imaginary Property writes "HP and Staples are facing an anti-trust lawsuit over replacement printer cartridges. According to the lawsuit, HP paid Staples $100 million to refuse to stock competing ink cartridges. HP could make that back in short order when you consider that printer ink can cost $8,000 per gallon and certain printers deceive users to waste as much as 64% of their ink."
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  • by Jack Malmostoso (899729) on Wednesday December 19 2007, @09:12AM (#21750440)
    Prices of various liquids per mL:
    http://eatliver.com/i.php?n=2648 [eatliver.com]
    As Jeremy Clarkson noted in Top Gear: the fact that oil companies extract oil, refine it, distribute it all for a few cents a liter is actually amazing. Gasoline is extremely cheap!
      • Re:Mod parent up! (Score:5, Insightful)

        by timeOday (582209) on Wednesday December 19 2007, @10:30AM (#21751098)
        The "cheapness" of oil is only a testament to the value of crude as a natural resource, not to the benevolent oil companies who do so much for so little. Future generations will look back enviously at how we got energy just by sticking a tap in the dirt and turning on the spigot.
  • by dsginter (104154) on Wednesday December 19 2007, @09:13AM (#21750452)
    Just ask Canon about the failure of their Wifi printers - you could not buy them at *any* retail store (or even Dell, which carried the rest of Canon's lineup) because the printer did not enable the retailer to sell the $30 USB cables.
    • by Kranfer (620510) on Wednesday December 19 2007, @09:16AM (#21750474) Homepage Journal
      When I worked at best Buy I remember us having wireless canon printers for a short time. I know we always had the HP Wireless printers as well. But Best Buy always seems to pull them quickly cause the only things we could sell with it were paper and ink... no cable :( The 08975123908475239048% markup on USB cables was just that important... although I knew when I left Worst buy that I should have purchased a shit load of USB Cables... they were like 75 cents on my discount at the time. No idea how much they are now, I heard the discount went south int he last few years.
      • by Shakrai (717556) * on Wednesday December 19 2007, @09:31AM (#21750572) Journal

        Who the hell pays $30 for a USB cable? I've got a drawer full of them that I've gotten free with various pieces of equipment over the years. They should be at most $5 and even that is high. I suppose these are the same morons who pay $60 for an HDMI cable when you can buy it on Amazon for $2.

        Who the hell buys ANY cable from a retailer like Best Buy or Circuit City? Want something worse then USB? Consider Cat5. I love seeing a 25 foot patch cord thats going for anywhere from $25-$40. $1/foot to $1.6/foot. WTF is that? I can buy a thousand feet of the shit for around $80 ($0.08/foot). Yeah, they should get some mark-up for them, but that much?

        Wanna "make friends" at a place like Best Buy or Circuit City? Wait till you see Grandma about to buy one of those cables and is being pounced on by the salesguy -- then tell her about the twenty other options for getting that cable for next to nothing. It's worth it just to see the look on the sales persons face. Wonder if they get commissions for ripping people of^W^W^Wselling those cables?

        • by bleh-of-the-huns (17740) on Wednesday December 19 2007, @09:44AM (#21750676)
          While I am no fan of the big box retailers in general, I do recognize the fact that they do have overhead costs. I worked at Compusa in the early 2k's just after the dot.bomb era (I was a victim), and while yes, cables and accessories are rediculously priced (the rounded IDE cables back then being sold for $29 actually cost around $4, which is what I paid while working there), the profit margin on laptops and PC's was ridiculously small, we are talking 1 to 3%. There has to be a balance for stores to remain viable, if they sold everyone at 2 to 5% profit, the store would be out of business in no time. This goes for any store, regardless of industry or size. So if you want cheap laptops and TV's, then yes, they have to markup something else, otherwise expect much higher prices on the primary items you purchase.

          That being said, personally, yes I bought my TV from Best Buy, was a good deal, and on sale, no I did not buy anything else from them relating to my TV as I knew I could get those things elsewhere, thats just me trying to get the best deal for myself, but I cannot get pissed off at a entity trying to remain viable and in business.
                    • by CottonThePirate (769463) on Wednesday December 19 2007, @01:07PM (#21753028) Homepage
                      Opportunity cost is only valid if you can get paid for the time. If he took 2 hours off work to put in the water heater then he lost pay/vacation etc and he had that "cost" associated with it. Most people enjoy working on their house so he probably considers it equal to spending those 2 hours reading slashdot/playing wii/ etc. Plus if you are on salary then you couldn't make that extra money by working more anyway. So the $100 he didn't have to pay a plumber is indeed $100 saved to him in that he didn't have to write a $100 check.
        • by skoaldipper (752281) <skoalstr8@@@gmail...com> on Wednesday December 19 2007, @09:59AM (#21750816)

          Who the hell buys ANY cable from a retailer like Best Buy or Circuit City?
          Dummies like me. Spent $20 on a USB connector last night to see if I could transfer video from my DishTV to computer after I switched to Uverse.

          I guess guys like Best Buy figure there's a handful of lazy people like myself who eventually get tired of digging around in boxes for hours hunting down an old cable you swore you had at one point in time, getting distracted even further as you scrounge up and discover old 5-1/4 floppies and a Hayes baud modem with rubber ear muffles in mystery box number 23. I don't know why I cling on to this crap, but Best Buy knows me better than myself I guess.

          By the way, as I left store last night, some guy in tattered clothing with a grizzled beard was lurking in the parking lot and approached me, "Pssst. Hey, buddy. could you spare a DB9 to DB25 connector for a friend?"
        • by MarkGriz (520778) on Wednesday December 19 2007, @10:25AM (#21751038)

          Wanna "make friends" at a place like Best Buy or Circuit City? Wait till you see Grandma about to buy one of those cables and is being pounced on by the salesguy -- then tell her about the twenty other options for getting that cable for next to nothing.
          So that's what nerds have been reduced to.... picking up old ladys at Best Buy with promises of cheap USB cables. *shudder*
  • I'm pretty sure that paying a retailer not to stock your competitors' products constitutes collusion and is a clear violation of antitrust laws. This is akin to Nike paying Wal*Mart $100 million not to stock Adidas shoes. The only thing that muddies the water a little bit is that 'compatible' inkjet cartridges violate the DMCA and probably several HP patents, and hence are illegal. Anyone know how this might affect the lawsuit?
  • Cheap Ink (Score:5, Insightful)

    by Herkum01 (592704) on Wednesday December 19 2007, @09:19AM (#21750492)

    It is only a matter of time before someone offered inexpensive ink. It was obvious that HP was taking extreme measures to prevent someone from competing in that space.

    This shows how important regulation of businesses we need to have. Too many people don't want to get involved in anything (government or otherwise). It is sad that the people who run these businesses feel they don't have to be accountable at all to anyone about how they run their business.

  • by 91degrees (207121) on Wednesday December 19 2007, @09:20AM (#21750496) Journal
    Can be refilled. Runs cartridges until they're dry. Built like a tank.

    Wish they still made printers like that. I'd like something as robust but faster and higher resolution.
  • by bigsexyjoe (581721) on Wednesday December 19 2007, @09:25AM (#21750524)
    Go to Cartridge World, or even Walgreens now. They will refill your ink very cheaply. You need to print a couple of pages to get the ink to come out, but after that, it is as good as new.
  • by Ezza (413609) on Wednesday December 19 2007, @09:26AM (#21750530)
    When the cartridges shipped with your printer only have 10% the capacity of a new one off the shelf, to force you to buy a new one (with it's far higher profit margin), THAT is what people should be jumping up & down about.
  • by gyrogeerloose (849181) on Wednesday December 19 2007, @09:27AM (#21750536)

    ...is printers that refuse to print a document when the level of one color of ink is low even if the document being printed doesn't use that color at all. I have an Epson that I like pretty much. It has individual cartridges for each color of ink but if, say, the cyan cartridge is empty, I can't print even if the page is nothing but black text. There's no real reason for it, it's strictly a software (or firmware) limitation put in by the manufacturer.

      • by Anonymous Coward on Wednesday December 19 2007, @12:54PM (#21752852)
        ...You _could_ be damaging your printer by doing this.

        Full disclosure : I work for Staples (albeit an overseas division, not the USA/Corperate). Hence the reason I'm not logged in - I don't want this causing me problems at work. That said, I'm probably not high enough level for that anyway. :P

        Inkjet printers (mostly) stop working when a cartridge is empty or near empty to stop air getting into the lines and heads. If air gets into them, remnants can dry up inside, effectively blocking the machine on that colour stream. The problem is more likely to occur on newer machines - the reason bieng that the higher resolutions available today require narrower heads that are easier to block.

        The problem from the manufacturers point of view is that a customer won't care _why_ their printer has 'broken', they'll just care that it has. Result? Manufacturers rely on technological measures to try and prevent the end-user from damaging the machine in the first place.

        This is also the reason that a machine will run a cleaning cycle every two or three days of it's own accord. People complain that it wastes ink - but it's the machine trying to protect itself.

        Best advice I can give you if you're looking at printers is to consider your needs. Unless you're printing photos, or onto specialist papers regularly enough to an warrant an inkjet, a laser is almost always a better alternative in the long term. A laser based machine cannot print to textured paper (it will scar the imaging drums and leave marks/lines in subsequent prints), and you need to be careful when buying photo paper - inkjet papers normally aren't heat treated, and will collapse when they go through a laser printers fuser.

        That said, laser printers are cheaper to run, lower maintenance (paper dust doesn't screw them up as badly), quieter, faster, and dont give bleedthrough on the cheap papers (ie, better prints).

        If you have to stick with an inkjet, don't buy cheap because the cheap ones are always subsidised on the inks. Certain manufacturers don't chip the cartridges (allowing you to use refills without having to modify the firmware or software environment), and Brother go so far as to tell you how to refill their cartridges in the manual.

        Integrated heads (Epson, Brother, Canon, and some newer HP printers) won't require recalibration when you change cartridges, and are less likely to give banding artifacts, but normally require a techician to replace if they go bad or reach the end of their service life.

        Replaceable heads (Most Hp printers, Lexmark, and Canon (they have integrated heads that can be user-replaced when they wear out)) require calibration on change, and are generally less suited to high-quality photo prints and the likes, but if you're printing to very rough papers, or in high dust environments, or very infrequently, will be a lot less hassle than the integrated solutions.

        Basically, use your head and you'll be fine.

        Wow that was long. :/
  • by dada21 (163177) <adam.dada@gmail.com> on Wednesday December 19 2007, @09:31AM (#21750580) Homepage Journal
    Since I run a small print shop for churches, we go through a ton of ink and toner, to the tune of about $3000 per week. We buy ALL our ink and toner is very large amounts (toner by the kilogram, ink by the half gallon). Refills are cheap. And yet, I don't think that retailers deciding together to not stock competitive products is "bad" collusion -- it's just how their market needs to work to be profitable.

    Anyone can go online and buy cheap refilled cartridges that tend to work. If they're buying locally, it might be that they don't trust the Internet (stupid reason), or that they waited too long to stock up on ink (probably true). I yell at my folks constantly for paying $40 for one cartridge when I can get them a replacement for $3, but usually its due to the dreaded "Out of ink" message. Convenience can often times mean MONEY.

    The manufacturers screwed up, big time. They didn't listen to the market, and they decided to give away the printer and hope to make it up on the ink. That's not how most markets work, not even the razor market now. Every item has to have a profit, or someone will find a way to sell your high markup goods cheaper. Many more people now are learning that the $49 inkjet has $49 cartridges OEM, or $12 cartridges aftermarket. The days of the $49 loss-leader are over (although I think you can probably make a profitable inkjet that sells at $35, with reduced features and a generic print driver).

    I honestly don't think collusion is a big deal. I know it supposedly hurts consumers, but in the long run, competition DOES begin due to what seems like obvious price fixing. I recall the early days of computer RAM when you honestly had few resources for brands. Now we have dozens. When a few companies collude on RAM pricing, the competition generally fixes it. It may take a few years, but it happens, and the worst thing to happen to those colluding is that they lose market share or go out of business when consumers discover that they've gouged people.

    Legal action is unnecessary. Let the market work. More laws and regulations will make it HARDER for new companies to enter the market.
    • by Manchot (847225) on Wednesday December 19 2007, @10:40AM (#21751198)
      Only on Slashdot would someone argue that antitrust laws make it harder for new companies to enter the market. By definition, a company can't become subject to the antitrust laws unless it is already a major player in the marketplace. The whole RAM price fixing debacle wasn't solved by the oh-so-perfect market. It was solved by billions of dollars in fines for the companies involved. IIRC, Samsung got a $300 million fine, and other companies got fines in excess of $100 million.

      I see the market from an electrical engineering perspective. Overall, it's a complicated feedback system that is very nonlinear. To a certain extent, it can be modeled as a first-order linear system, and this is what the rabid free-marketeers see when they look at it. Any change in the input basically causes the market to immediately adjust its outputs to account for that. However, this perspective is simply wrong. At the very most, it's a rough approximation. First of all, the system has higher order components, by virtue of the fact that each entity in the marketplace roughly forms a first-order system in and of itself, and so the overall system has an order given by the number of entities in the market (about 6 billion). It's also very non-linear, and is subject to the whims of chaos (i.e., sensitive dependence on initial conditions). If, for example, a group of RAM manufacturers wanted to gouge the public and doubled all RAM prices, the demand for RAM wouldn't simply halve: it would decrease in some strange way.

      It should also be stated that if Ron Paul had his way, collusion such as this would be perfectly legal.
      • by dada21 (163177) <adam.dada@gmail.com> on Wednesday December 19 2007, @10:49AM (#21751292) Homepage Journal
        Only on Slashdot would someone argue that antitrust laws make it harder for new companies to enter the market. By definition, a company can't become subject to the antitrust laws unless it is already a major player in the marketplace. The whole RAM price fixing debacle wasn't solved by the oh-so-perfect market. It was solved by billions of dollars in fines for the companies involved. IIRC, Samsung got a $300 million fine, and other companies got fines in excess of $100 million.

        What are you talking about? Fines stopped the price fixing scheme?

        Let's look at what happened in RAM price fixing history:

        2001, Elpida, Infineon, Hynix, Micron, and Samsung collude to fix prices on RDRAM.
        2003, RDRAM is dead, Intel gives up hope. Reason? Price was too high.
        2004, Discovery is made regarding price fixing.
        2005, Found that companies colluded, were fined.

        So let's see -- they stopped price fixing in 2003 because in 2005 they were fined?

        What sort of malarkey are you trying to pass off in order to be seen as correct? You didn't provide one source of information, you didn't properly compose an answer that could be reviewed easily.

        It should also be stated that if Ron Paul had his way, collusion such as this would be perfectly legal.

        Thank God! I have competitors who have colluded together on numerous occasions to land contracts. It's called a boat race. "You win this one at a major profit, we'll win the next." Guess why my company has sustained steady, 10%-20% growth annually, for 15 years? Because we decided against colluding. Seven of our largest suppliers offer us kickbacks, which we said no to. We're more competitive without them.

        I _love_ collusion. It opens a huge market for those of us who want to compete. It's VERY easy to raise money to start a business in a competitive market, even if you need 9 figures. The biggest reason we've seen fund-raisers fail is when venture capitalists ask: "How are the government regulations in that sector?"

        When government introduces new laws (supposedly to prevent monopolization), the smaller venture capitalists exit the market. The bigger ones stay, of course, because they're powerful enough to subvert, or even write, the government laws.

        Ron Paul, on the other hand, understands that the Federal government has absolutely no Constitutional power to declare regulations on businesses this way. They're anti-consumer, anti-competition, and anti-liberty. Collude away! I say. The competition will love you for it.
  • Old news (Score:5, Informative)

    by ledow (319597) on Wednesday December 19 2007, @09:41AM (#21750640) Homepage
    Haven't personally used an inkjet for about six years. Laser all the way. You can get colour networked laser for home use for about £300, with reasonable sized toners. I even have a Samsung that have a refillable combined toner/drum that's only on it's second actual toner/drum and has been refilled dozens and dozens of times from a £10 toner bottle. Perfect prints every time, used every single day.

    The amount of time you need colour is pitiful, and for home use (business should not be using inkjet, no excuse) it's virtually all for photos - that's the only real time a laser can't cut it, when you want a small glossy. Then, taking your photos on a card down to the local supermarket works out much, much, much cheaper. My brother bought a load of second-hand HP Laserjet 4MV's on eBay - all ex-business, all done about 100,000 pages minimum, all still going strong five years later and toner is dirt cheap and easy to come by. This is a person who prints out 50 copies of 100-page brochures every week.
  • Laser Printer (Score:5, Insightful)

    by SCHecklerX (229973) <slshdt@freefall.homeip.net> on Wednesday December 19 2007, @09:47AM (#21750712) Homepage
    Why people continue to buy ink jets is beyond me. I paid only $350 for an HP Color Laserjet 2605dn a year ago, and my starter cartridges are still going strong. This printer has built-in duplexing, networking, web management, and is postscript so works flawlessly with any computer you'd like to use with it. Bonus: no worrying about ink cartriges drying up, or print heads clogging.

    Buy a laser printer. For pictures, have them developed at wal-mart for like $0.10 each.

    BTW...HTH do I tag an article on /. I'm not a subscriber, but I've had this account for several years, so according to the FAQ I should be able to tag articles.
  • So How Long (Score:5, Insightful)

    by ajs318 (655362) <sd_resp2.earthshod@co@uk> on Wednesday December 19 2007, @10:00AM (#21750832)
    So how long will it be before somebody manufactures an industrial-grade inkjet printer with durable metal parts, which takes bulk ink (by flexible hoses, from litre bottles which can be hot-swapped) and incorporates PostScript Level 3 in hardware so absolutely no driver issues?

    There's definitely a market for such a machine. I've been using a HP Business Inkjet, which is certainly semi-industrial and although not PS, uses a common driver; but it still takes ink cartridges (double-sized black cartridge, though) and a new set adds up to a hefty amount. A bulk-fed, metal-built printer would easily outlast the number of cartridges you could have bought for the same price.
  • by Fantastic Lad (198284) on Wednesday December 19 2007, @10:28AM (#21751074)
    --I remember when I had an old tank-tough HP Laserjet II. (It needed these huge postscript cartridges just to output in a font other than courier.) It was only 300 DPI, but the output was sharp and sweet. It used a gas laser because LED lasers hadn't yet been invented, but that beast totally rocked. --It would work forever, and its tone cartridge lasted for many thousands of copies. And the paper feed NEVER jammed. It was one of the finest bits of engineering I've ever come across, and HP was a company which made me think, "Ah! Humans are awesome creatures capable of doing wonderful things!"

    But then something happened at HP. A number of years later, I remember one of the top dogs in management declaring that they were taking the company in a new direction; that their old methods were being updated to reflect better business models. --This spin-doctored response came as when they were asked why their printers had begun to suck shit.

    I today own an HP Laserjet 5L. It is a piece of crud. --It's output looks sharp, but it's a flimsy piece of junk which stopped working properly about a year after I'd bought it. It jams constantly and the toner cartridge seems to run out far more frequently. I'd tell HP to go to hell, but I think they may already be there.


    -FL

    • by ajlitt (19055) on Wednesday December 19 2007, @11:03AM (#21751444) Homepage
      A couple of years before I got rid of my 5L, I found out that there is a recall on these printers. It appears that the paper lifter isn't "grabby" enough, causing it to jam when feeding paper. HP had a program where they would send you a kit to install a new lifter for free. You might want to look around and see if they are still offering it.

      As far as what happened to HP... Two words: Carly Fiorina.