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Why printer ink is so expensive

Complex technology and staunch patent enforcement help keep ink prices high. Still, some low-cost alternatives can be found.

By Staff writer of The Christian Science Monitor / January 9, 2008

The idea has been around since King C. Gillette first crafted his disposable razor: Hook customers by selling the main item for cheap and then mark up the price of blades.

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It's a century-old business model that today's tech industry has taken to heart.

Hand out free cellphones, profit off the subscription fees. Lose money on each video-game console, earn it back on the games themselves.

But recently, computer printer manufacturers have come under fire for allegedly pushing the plan too far. Some customers and industry analysts charge that inkjet companies are using their influence to unfairly distort the price of replacement ink cartridges and shut out off-brand competitors.

"What I've found over the past few years is that ink itself is a very good commodity to be in," says Tom Merritt, executive editor of CNET, a technology news and reviews website based in San Francisco.

High-quality ink is expensive to make. It's packaged in specially designed cartridges that are difficult for others to replicate. And it comes saddled with patents and copyrights that the companies staunchly defend.

"But what's happening is that [printer manufacturers] have gotten so aggressive now in preserving their profits that a lot of people worry they are clinging too tightly to this minimonopoly," he says.

It's a concern that escalated into an antitrust lawsuit that was filed in Boston last month. The legal complaint accuses Hewlett-Packard of paying Staples $100 million to stop selling off-brand ink cartridges that are compatible in HP printers. Both HP and Staples deny any anticompetitive practices.

Despite the calls that the inkjet market stifles competition, there are still many alternatives available. One of the easiest ways to save a few dollars on the cost of cartridges is through generic brands.

"About 10 years ago, there were only about four places for a small company to buy generic printer ink," says Tim Molhoek, owner of O-ink, a small chain of printer supply stores in Michigan. "Now, there about 100 worldwide – the vast majority are in Asia."

These off-brand outfits often collect used tanks, pump them full of new ink, and sell them at a discount.

Another avenue to consider is refilling your own spent cartridges. Plenty of shops, from big-box stores such as Walgreens to smaller outfits like Mr. Molhoek's, run their own, in-house refill programs, with prices ranging widely.

Ink cartridge antitrust suit 

Last month, a California man sued printer giant Hewlett-Packard and office supply chain Staples for allegedly breaking antitrust laws. The legal complaint accuses HP of paying Staples $100 million to stop selling off-brand ink cartridges that are compatible in HP printers.

This suit comes after a decision by Staples early last year to stop making its store-brand printer ink. The chain had taken used HP cartridges and filled the empty shells with generic ink, says Staples vice president of technology marketing Scott Rankin. Stores then placed the discounted cartridges on its shelves right next to the genuine HP brands.

But last year, Staples discontinued the program because "we really just decided to focus our resources on other areas," Mr. Rankin says. "It just became pretty difficult for us to continue to innovate in this area and really match the quality and speed [of the printer makers.]"

A few months after withdrawing from store-brand HP ink, Staples also stopped making similar cartridges for Epson printers.

But the lawsuit, which seeks class-action status, alleges that HP encouraged Staples to end the program, thereby colluding to carve up the market.

"They say 'we are not going to compete on your turf. You're not going to compete on our turf,' " says Ethan Preston, one of the lawyers for the plaintiff, Ranjit Bedi, in the antitrust suit. "HP sells printer cartridge for its printers, and Staples, up until this arrangement, sold printer cartridges for HP printers. And it's as simple as that."

Mr. Preston would not elaborate on his client's identity – other than that Mr. Bedi had purchased an HP printer and several print cartridges – nor how he reached the $100 million figure.

Both HP and Staples deny any anti-competitive practices.