HP Escapes Monetary Penalties in Class-Action Settlement

HP Escapes Monetary Penalties in Class-Action Settlement

A U.S. District Court judge in California has approved a settlement between HP and customers who sued the company over firmware updates that prevented its printers from working with third-party ink and toner. The agreement spares HP from paying monetary compensation to affected users.

The legal dispute began in December 2020 when Mobile Emergency Housing Corp. and Performance Automotive & Tire Center filed a class-action complaint against HP. The plaintiffs accused the company of forcing users to rely exclusively on HP-branded ink and toner by remotely transmitting firmware updates that rendered competitors’ cartridges incompatible. The lawsuit focused on a November 2020 update and sought a ruling that HP’s actions were unlawful, demanding an injunction against the updates along with monetary and punitive damages.

The complaint likened HP’s firmware updates to malware, claiming they altered printer functionality and diminished performance by blocking third-party supplies. HP, on the other hand, described this practice as “Dynamic Security,” framing it as a protective measure against security risks, despite experts downplaying any genuine threat of printer hacking through ink cartridges.

After years of litigation, HP reached a settlement in August 2024, which Judge Susan Van Keulen approved on Tuesday. As part of the agreement, HP did not admit any wrongdoing and will not pay financial compensation to customers affected by the firmware changes.

However, the company will pay $5,000 each to Mobile Emergency Housing Corp., Performance Automotive & Tire Center, and David Justin Lynch — an additional plaintiff — for their services on behalf of the class. HP will also cover $725,000 in attorneys’ fees and expenses.

In what plaintiffs view as a win, HP agreed to let users of specific printer models decline firmware updates that push Dynamic Security. The settlement terms state HP must continue disclosing information about Dynamic Security and data collection for these models, dubbed “Class Printers.” HP is also required to inform users that Dynamic Security blocks cartridges using non-HP chips and can be enforced through periodic firmware updates.

The settlement only applies to certain printers impacted by the November 2020 firmware update, including models like the HP Color LaserJet Pro M254DW and HP LaserJet Pro MFP M428FDW, among others. Printers not on the list remain subject to Dynamic Security restrictions.

HP now displays disclaimers on most printer product pages, warning that devices are designed to work only with cartridges using new or reused HP chips. These disclaimers note that firmware updates may block previously functional third-party cartridges. Although most HP printers offer users the choice to accept or decline updates, programs like HP Instant Ink mandate automatic firmware updates.

Despite the settlement, Dynamic Security continues to be a core feature of HP printers. For models produced after December 1, 2016, the company retains the right to enforce Dynamic Security at any time, potentially cutting off third-party cartridge compatibility with future firmware updates.

This isn’t the first time HP has faced legal consequences over its cartridge-blocking practices. In recent years, the company has paid millions in settlements across the globe, including $1.35 million to European customers in 2022, €10 million in Italy in 2020, and AUD$50 per affected Australian customer in 2018. In the U.S., HP settled a similar lawsuit in California for $1.5 million in 2019.

HP still faces ongoing legal battles related to its ink and toner practices. In January 2024, a new class-action complaint was filed in the U.S. District Court for Northern Illinois, accusing the company of monopolizing the replacement cartridge market through Dynamic Security updates in late 2022 and early 2023. Plaintiffs in that case seek a legal ruling against HP, an injunction, and financial damages.

Another lawsuit, filed in 2022, alleged that certain HP all-in-one printers wouldn’t scan or fax without ink. That case has since been dismissed.

Meanwhile, HP’s printers have faced technical issues beyond Dynamic Security. Earlier this month, a firmware update disrupted the functionality of specific HP printer models, preventing them from printing — even when using HP-branded ink. HP stated last week that it is “actively working on a solution.”

Related:

• HP’s Two New Printers Address Security and Sustainability Needs
• HP Firmware Update Disrupts LaserJet Printers
• HP to Cut Jobs Amid Financial Growth and Tariff Pressures
• HP Introduces Sri Lanka’s First Large-Format Ink Tank Printers
• HP Reports Q4 FY2024 Financial Results
• HP Taiwan China Confirms Employee Layoff

Comment:

Please leave your comment below about the news: HP Escapes Monetary Penalties in Class-Action Settlement.