India fines HP over reseller bid rigging in PCs and printer supplies

The Competition Commission of India has fined HP Inc. and several resellers ₹138.85 crore, about $14.4 million, after finding cartel conduct tied to bids for PCs, printers and printer supplies on a government procurement platform. The regulator said HP India helped coordinate reseller pricing and tender participation, conduct that matters beyond one vendor because public-sector procurement is a major channel for enterprise hardware sales in India.

The CCI said HP and resellers engaged in practices including bid rigging, cover bidding, price fixing and customer allocation between 2017 and 2020. According to the regulator, WhatsApp records reviewed in the case showed HP staff and some resellers were involved in a collusive arrangement over bids.

The penalty is unlikely to be financially material for HP at a global level. The operational issue is more pointed: the regulator found that HP India was not merely responding to reseller behavior, but facilitating coordination in parts of its channel.

What the regulator found

In the order concerning printer supplies, the CCI said HP told resellers what prices to quote for tenders posted to a government procurement site. The regulator also found that HP prevented some resellers from bidding on certain tenders.

Cover bidding was one of the practices identified by the CCI. In such a setup, one bidder submits an intentionally uncompetitive quote, leaving another preferred bidder better positioned to win. The regulator also said HP decided in advance which reseller would serve which customer.

The CCI’s order said HP’s conduct was aimed partly at keeping the company competitive against rival PC and printer makers, rather than favoring one reseller. The regulator also cited another motive: stopping some resellers from shifting to counterfeit ink and toner as pricing pressure increased.

According to the CCI, tier-two resellers faced pressure from newer resellers cutting prices and threatened to move to lower-cost counterfeit products to compete. Some of those resellers then reached an understanding on pricing so they would not undercut one another. The regulator said HP facilitated that arrangement to protect its printer supplies business.

The order stated that HP India was “commercially forced” to support the collusive arrangement adopted by tier-two resellers. That is the regulator’s characterization of HP’s position, not a defense that removed liability.

PC tenders and reverse auctions

A separate CCI order addressed HP’s PC sales. In that matter, the regulator said HP’s conduct helped the company handle reverse auctions used in some tenders, where bidders compete by lowering prices.

The CCI said HP India faced a risk that its resellers would exit early from auctions because of pricing pressure, which could result in no HP sale. The regulator found that coordination among HP resellers was designed to ensure that at least one HP reseller remained in the final round.

The orders require HP and the resellers involved to stop the conduct. The CCI did not frame the matter as a dispute over product quality or counterfeit goods enforcement alone; it found that HP’s response crossed into coordination of bids and customer allocation.

For enterprise hardware vendors, the case is a reminder that channel control becomes legally sensitive when it affects independent reseller bids, particularly in public procurement. Vendors often try to prevent channel conflict and gray-market leakage. The CCI’s findings show where that can turn into antitrust exposure when pricing, tender participation and customer assignments are coordinated through the vendor.

This story draws on original reporting from The Register.