According to the ACCC, HP employed a technology known as a Dynamic Security Feature (DSF), which prevents the use of ink cartridges other than its own brand.
Some 220,000 printers have been sold in Australia using the technology, but many were done so before customers purchased them. Others were impacted by a firmware update once it was downloaded by customers.
“Consumers were not made aware of the restriction on using non-HP ink cartridges when buying the printer or downloading the firmware update, and were denied the choice to accept or reject it,” said ACCC deputy chair Dr Michael Schaper.
“The ACCC was also very concerned that HP used technology to change these printers’ functionality after purchase, without alerting consumers to the restriction on the use of non-HP ink cartridges which was being installed.”
Dr Schaper added: “Businesses must disclose all important information about their products, including if there are any restrictions on the use of non-genuine parts or refills.”
The ACCC revealed that HP has entered into a court-enforceable undertaking to compensate customers $50 each if they were unable to use non-HP ink cartridges.
More than 2,000 customers are believed to have been directly impacted, meaning the payouts for HP could top $100,000.
On its website, HP said the compensation offer will be offered to “certain consumers in Australia who were unable to use their HP printer when trying to print using an ink cartridge with a non-HP chip on or after 13 September 2016”.
HP has created an online form to manage the compensation process, which also has more information on who is eligible to receive the offer.
“We are pleased that HP Australia has reached a settlement with the ACCC,” a spokesperson for HP said.
“HP uses dynamic security in select printers (a) to protect the quality of the consumer experience from potential functionality risks that can be introduced using cartridges with cloned chips or modified or non-HP circuitry, (b) to protect HP’s intellectual property, and (c) to reduce counterfeiting of HP supplies and warranty fraud.
The spokesperson added that the company “will continue using dynamic security in select printers in accordance with its settlement with the ACCC”.