Bravo! Ranjit Bedi Takes On HP, Staples

If the rip-off prices of inkjet printer cartridges come down in the U.S, you’ll have to thank a desi guy in California – Ranjit Bedi.

On Monday, Ranjit Bedi filed an antitrust lawsuit against HP and office supplies store chain Staples in the U.S.District Court in Boston charging the two companies with illegally colluding to stop competing in HP-compatible printer cartridges.

Bedi alleges in his complaint that HP paid Staples over $100 million in “marketing incentives” to stop selling competing HP-compatible cartridges and sell only HP-branded HP-compatible cartridges.

In his nine-page complaint, Bedi alleges:

The HP-Staples Agreement is an illegal agreement between competitors to stop competing, allocate to HP the market of Staples customers purchasing HP-Compatible Cartridges and increase, stabilize, fix and/or maintain the price of HP-branded HP-Compatible Cartridges sold by Staples and HP.

The HP-Staples Agreement is a naked restaint of trade that prevents Staples customers from purchasing lower-priced and/or higher-quality Competing HP-Compatible Cartridges, and that increases the price of HP-branded HP-Compatible Cartridges sold by Staples and HP.

HP is the dominant player in the printer business, which is a very profitable segment for the company.

HP reported an operating profit of $4.3 billion on revenues of $28.5 billion in its Imaging & Printing Group in fiscal year 2007. The company claims a market share of about 45% in the inkjet printer segment.

U.S. consumers frustrated with the extortionist prices of inkjet cartridges have been seeking relief by buying lower-priced replacement cartridges from third-party vendors. But the large printer vendors have been taking aggressive measures to prevent consumers from using cartridges offered by third-party vendors.

By the way, do you know who heads HP’s printer business – none other than another desi Vyomesh Joshi (Executive VP of Imaging & Printing Group). Interesting, right.

Elsewhere in the complaint, Bedi alleges that:

The HP-Staples agreement is a horizontal agreement between direct competitors. It reduces the output of HP-Compatible Cartridges, increases the price of HP-Compatible Cartridges, eliminates inter-brand competition between Staples and HP, and limits non-price competition in the market for HP-Compatible cartridges.

Bedi is seeking an injunction against the allegedly anti-competitive HP-Staples agreement, unspecified damages and class status for the law suit.

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