- What is clear is that the era of treating bid-rigging as a cost of doing business is drawing to a close — and companies that fail to adjust will find themselves paying far more than fines.
HP India has been hit with a staggering fine of approximately Rs1.4 billion (around $14.4 million) after the Competition Commission of India (CCI) found the company guilty of engaging in “cartelisation” to manipulate government procurement tenders.
Together with a network of its authorised resellers, HP orchestrated a systematic scheme to rig bids, inflate prices, and shut out genuine competition in the sale of IT hardware and printing supplies to government agencies.
At the heart of the case lies a coordinated effort between HP India and its resellers to game India’s Government e-Marketplace (GeM), the official online procurement platform through which ministries, departments, and public sector units purchase goods.
Between 2017 and 2020, HP India actively facilitated an arrangement whereby select resellers colluded to submit pre-arranged bids — a practice designed to create the illusion of competitive pricing while ensuring that contracts ultimately landed with an HP-affiliated partner.
The CCI’s investigation uncovered three primary tactics at play:
- Cover Bidding: HP India arranged for certain resellers to submit “support” or “cover” bids at deliberately uncompetitive prices. This gave the false impression of a genuine, multi-vendor bidding process while ensuring that a pre-selected HP partner would emerge as the winner. The losing bids served only as window dressing.
- Price Fixation: Rather than allowing market forces to determine contract pricing, HP coordinated with its resellers to set prices at predetermined levels. This eliminated any incentive for resellers to undercut one another in pursuit of government business.
- Customer Allocation: In some instances, HP and its reseller network divided up government customers among themselves, allocating specific departments or agencies to particular resellers and thereby neutralising competition from the outset.
The CCI’s order documented a telling detail: “Certain resellers approached HP India to help facilitate an arrangement that would enhance their chances of securing Government supply contracts against other competing HP India resellers.” Rather than rebuffing these overtures, HP obliged — effectively becoming the architect of its own illegal cartel.
Two separate cases
The penalty was actually handed down across two distinct orders, each addressing a separate category of products where the collusion took place.
In the first case, concerning personal systems — including desktop computers, notebooks, and related accessories — the CCI imposed a penalty of approximately Rs1.27 billion (around $13.1 million) on HP India. Five resellers were identified as participants in this scheme and received combined fines of roughly Rs12.2 million.
The second case targeted the printer supplies market; including toner cartridges, ink cartridges, and other consumables used with HP print hardware. Here, the CCI found that HP India — along with sixteen of its Tier-2 resellers — had engaged in a separate but similarly structured cartel. For this offense, HP was fined an additional Rs119.8 million (around $1.2 million), while the implicated resellers faced their own collective penalties.
Across both cases, the total fines reached Rs1.42 billion. Twenty-one resellers were collectively penalized to the tune of about Rs35.2 million (around $365,000).
Resellers pushed to the edge
The CCI’s findings also shed light on the collateral damage inflicted by the cartel. With prices artificially inflated through coordinated bid-rigging, some resellers outside the inner circle found themselves unable to compete on price.
The “pressure on pricing,” as described in the CCI’s order, became so severe that certain resellers felt they had no choice but to “shift to low-cost counterfeit products to compete on price.”
This detail is particularly striking — HP’s anti-competitive behavior not only harmed government purchasers, who ended up paying inflated prices for IT equipment and supplies, but also pushed legitimate businesses in its own distribution network toward the counterfeit market simply to survive.
It is a stark illustration of how cartelisation ripples outward, distorting markets and creating perverse incentives far beyond the immediate circle of collusion.
Printer lock-in controversy
The CCI’s action against HP does not exist in a vacuum. The company has faced mounting criticism globally for business practices that critics describe as anti-consumer, particularly in its printer division.
For years, HP has deployed firmware updates that disable printers when customers attempt to use third-party ink or toner cartridges — a practice the company calls “Dynamic Security” and which critics more plainly describe as DRM for printers.
These updates, pushed over the air without user consent, effectively brick devices unless owners pay a premium for HP-branded consumables .
The issue came to a head in a widely reported incident involving an HP printer owner who discovered that her device had become entirely unusable after she declined to maintain the paid subscription required to keep it operational.
In HP’s subscription-based Instant Ink program, cartridges are effectively tethered to an active billing relationship — cancel the subscription or miss a payment, and the printer locks down, regardless of whether the physical cartridges still contain ink. For customers who believed they were purchasing a standalone product, this discovery has been met with outrage.
HP has faced multiple lawsuits over these practices, including allegations that the company raised ink prices during the same period it issued firmware updates designed to block competing cartridges — a one-two punch that plaintiffs describe as an unlawful effort to monopolize the aftermarket for printer consumables .
The CCI’s ruling carries significance beyond the immediate financial penalty. It represents one of the most prominent antitrust enforcement actions in India’s technology sector and sends an unambiguous signal to multinational corporations that bid-rigging in government procurement will carry serious consequences.
For HP, the reputational damage may prove more consequential than the fine itself. The company — which markets itself as a trusted partner for enterprise and government clients — has now been formally censured for systematically undermining the very competitive processes that public procurement depends upon.
As governments around the world increasingly scrutinise the conduct of dominant technology firms, HP’s Indian episode is likely to attract the attention of regulators elsewhere.