HP, a company with a PR record that would make Amazon blush, has once again made the public look at it with admiration. HP CEO Enrique Lores discussed the company's controversial ink ordering model and policy of forcing people to use its own cartridges in an interview, saying customers who don't use HP's own supplies are actually making a "bad investment."
HP has long insisted that its printer users avoid using cheaper third-party ink cartridge alternatives. It introduced a feature called Dynamic Security in 2016, which it said was a way to protect the company's intellectual property and the quality of the customer experience by preventing the use of ink or toner cartridges that did not contain reused HP chips or third-party electronic circuits. The feature was initially removed following customer outcry, but reappeared in 2017.
Hewlett-Packard Co. faces a class-action lawsuit in the United States that claims a firmware update will render customers' printers useless if they use non-HP replacement ink cartridges. The firmware is said to be updated sometime between late 2022 and early 2023, which happens to coincide with HP increasing the price of its ink cartridges.
When asked about the lawsuit in an interview with CNBC, Lores said: "I think it's very important for us to protect our intellectual property. We build a lot of our intellectual property into the printer inks and the printers themselves. What we're doing is when we find ink cartridges that infringe our intellectual property, we take the printer out of service."
Lores certainly wasn't trying to hide anything in his statement. The CEO then doubled down on his position: "Every time a customer buys a printer, it's an investment for us. We're investing in the customer, and if the customer doesn't print enough or doesn't use our supplies, that's a bad investment."
Lores goes on to warn about the dangers of using non-HP ink cartridges, as well as the consequences of using non-HP ink cartridges. "In many cases, this creates a variety of problems, from printers stopping working because the ink is not designed for our printers, to even creating security issues."
The CEO makes it sound like HP's cartridge DRM is solely for the benefit of its customers. "We've seen that hackers can embed viruses in ink cartridges, get into the printer through the ink cartridges, and then get into the network from the printer, so this could cause further problems for customers." He then seemed to shift from a customer-first perspective, saying: "Our goal is to make printing as easy as possible, and our long-term goal is to make printing a subscription service."
In 2018, HP had to compensate Australian users for DRM on its ink cartridges. A few years ago, the company also agreed to pay $1.35 million in compensation for this practice in Europe.
Lores isn't the first HP executive to tout the virtues of the company's ink subscription model. Chief Financial Officer Marie Myers boasted in December that the company was "locking in" users to its products.
"We can definitely see that when you move a customer out of a purely transactional model [...] whether it's InstantInk or adding to paper, we can see a 20% increase in customer value because you're locking in that person and committing to a longer-term relationship," Myers said.