Friday, September 23, 2016

HP, Winner of Worst Customer Service, Has Just Upped the Ante



HP Has Added DRM to Its Ink Cartridges. Not Even Kidding

David Paul Morris/Bloomberg/Getty Images

Wired  Brian Barrett  09.23.16

It’s not easy to be in the printer and ink business these days. Revenue is down. Obsolescence looms. Knock-off cartridges are a cheap and easy alternative. HP’s apparent solution? DRM. Great.
Just to be clear, this isn’t a solution for you. It’s a solution for them. Got an OfficeJet, OfficeJet Pro, or Office Jet Pro X printer? As of last week, reasonably priced third-party ink cartridges no longer work. For a company like, say, 123inkt, the Dutch outfit that sells HP-compatible cartridges and first noticed the change, it’s DRMaggedon. 

HP’s at least upfront about it. Brazen, even!

“The purpose of this update is to protect HP’s innovations and intellectual property,” the company told WIRED. Which is true. If only it protected HP’s customers as well.

Lockdown

HP has long installed a security chip in its cartridges and printers. If you use knock-off cartridges, you’ve probably seen a warning at some point that it isn’t HP-approved. Annoying, but that’s about all. 

Last year, though, HP implemented a firmware update in enterprise printers that, as of last week, locked out any cartridges but its own.
As the company says, “other cartridges may not function.”

If you’ve got a stash of third-party cartridges, or you happen to be a company that sells them, tough luck. “When you buy a device that’s designed to update itself automatically and the company reserves to itself in law the right to take away something [that device] had when you bought it, you’re really buying a device whose long-term feature set is unknowable,” says Corey Doctorow, special advisor to the Electronic Frontier Foundation.

Consumers wouldn’t accept this from other products, but it’s easier for companies to tweak software long after you’ve brought their devices home. You bought your printer, but imposing DRM after the fact reinforces that you never really own it.

“The people who make your microwave don’t get to tell you what kinds of frozen dinners to use,” says Doctorow. “That’s not a property relationship. That’s a feudal relationship, in which you are a tenant of these things that you’ve nominally purchased.” 

HP isn’t remotely the first to try this. You might remember Keurig’s misadventures with DRM K-Cups last year. It’s not even new to printers. Thirteen years ago, HP rival Lexmark fought a contentious lawsuit against Static Control Components, which made microchips that could circumvent Lexmark’s printer DRM. The court rejected Lexmark’s claim that the Digital Millennium Copyright Act protects its underlying software and security hand-off.

That doesn’t mean much here, though. The Lexmark case didn’t set a precedent, and the company simply adjusted its strategy. A few years later, Lexmark successfully argued in ACRA v. Lexmark that patent law protected it against consumers sending its cartridges to third-party companies who refill old Lexmark cartridges with cheaper ink.

You might ask how HP’s locked-in model is any different from what Gillette does with, say, its Fusion ProGlide razor and blades. “Gillette didn’t sell a razor that took any blade that you stuck on it until nine months after you bought it,” says Doctorow, “then detonate a booby trap that they had secretly loaded that caused it to only allow you to use Gillette razor blades.”

Sound absurd? It is. And it’s exactly what HP has done.

Desperate Times

You can almost understand why. Nearly two years ago, the monolith that used to be HP decided to split in two. Hewlett Packard Enterprise would focus on the cloud, while HP Inc. would deal in PCs and printers. One company looked to the future, leaving the other to milk the past for all it could.

The great cleaving occurred in October. Since then, the printer business has continued to falter. In its most recent earnings report, HP said printing revenue dropped 14 percent year over year, with supplies revenue (ink and toner) down 18 percent. It fell 8 percent between spring and summer this year alone. Printing remains profitable for HP, but no one takes a double-digit decline lightly, especially when ink and toner comprise nearly two-thirds of the company’s printing revenue—and nearly a quarter of overall revenue. The golden goose is laying fewer eggs.

There’s only so much HP can do to stave off the inevitable. It controls 53 percent of the domestic printer market, according to the NPD Group, but industry-wide, printer sales are down 11 percent year over year. This explains HP’s billion-dollar acquisition of Samsung’s printer and copier business, and its decision to shut down third-party ink cartridges.

The good news for consumers is that it likely won’t last. 123inkt already has chips designed to circumvent the updated HP security. They should be available in a week or so.

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