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European Competition Commissioner Mario Monti said on Wednesday that major computer printer makers -- including Hewlett-Packard, Lexmark International Inc, NEC, Canon and many more -- may face a European Union investigation into what is described as artificially high prices for ink cartridges.
The European Commissioner was responding to various press reports in recent weeks which allege that large manufacturers of printers have been employing techniques to ensure consumers only buy expensive ink cartridges.
Speaking to the press at a news conference on Wednesday, Monti said that the market for printer cartridges was important to both businesses and consumers but the sector remains relatively concentrated. "It is the role of antitrust enforcers to remain vigilant at all times," he said.
Monti said the EU will look closely at the whole market, but he declined to name companies that will be investigated. "There is probably a case here for us and I would assume also for the Americans," he said. "We intend to examine this in detail."
Charles James, the US assistant attorney general in charge of antitrust, who was in attendance at the meeting, declined to say whether the US government would examine the market, saying only that it was a matter for the powerful Federal Trade Commission (FTC).
Kentucky-based Lexmark's sales of printer supplies, including cartridges and toner, amounted to USD546 million in the first quarter, USD150 million higher than its printer sales. Meanwhile HP said on Tuesday its fiscal second-quarter sales of printer supplies rose 10 percent from the year-earlier period, driven by demand for ink-based products.
HP is the world's largest printer maker and it charges around USD49.99 for its cheapest inkjet model cartridge and USD29.99 for a black-and-white replacement cartridge. In fact, in HP's recent proxy battle with dissident board member Walter Hewlett over the merger with Compaq, Hewlett said the merger would dilute HP's lucrative printing business.
Following the news HP shares were off by six percent to USD19.22 just after 11am in New York. However, it is worth mentioning that HP's results, which showed worse than expected sales, were also released on Tuesday and could account for the fall in share prices. Lexmark, a 1995 spin-off of IBM, saw its shares decline by over 0.50 percent to 62.94.
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