HP pays $1.3m to settle dispute over printer security chip

Euroconsumers hail success, payments capped and only folks in 4 countries eligible so far

HP has settled a dispute brought of behalf of European consumers upset that a covert firmware update introducing the Dynamic Security Feature prevented them from using supplies made by third parties with a range of HP printers.

In 2016, HP deployed an update related to a security chip in OfficeJet, OfficeJet Pro and OfficeJet Pro devices to maintain secure comms between the cartridge and the hardware. This meant devices would not work unless the supplies had an original HP security chip.

The DRM-like mechanism resulted in the print hardware returning a message that the carriage was damaged and an HP-branded toner was required. A Dutch ink seller spotted the move, saying the mass rejection was actually set up in March 2016 and the software was activated in September that year.

The Electronic Frontier Foundation then got involved, demanding HP reverse the policy, but this was ignored. However in Australia in 2018, HP offered compensation for not disclosing the software's impact to customers that bought the devices with the DSF pre-installed or to anyone that received it via the firmware update. A class action settlement was reached in the US last December.

Across the pond, consumer rights organization Euroconsumers has confirmed that, as of last week, it too has reached an agreement with HP, after alleging consumers were "not properly informed" of the consequences of Dynamic Security.

"Under the agreement reached between HP and Euroconsumers, HP has agreed to establish a fund of up to USD 1,350,000 for payment of compensation to certain HP printer owners for losses allegedly suffered as a consequence of being unaware that their printers were enabled with Dynamic Security, which would limit their printers' functionality when using third party cartridges with non-HP chips or circuitry."

"The agreement cannot be considered as an acknowledgement of any fault or wrongdoing by HP nor as an acknowledgement by Euroconsumers of the groundlessness of its claims," it added.

Consumers in Belgium, Italy, Spain and Portugal are eligible to receive settlement compensation from HP Inc if they owned any of the models listed here [PDF] between September 1, 2016, and November 17, 2020.

A flat settlement compensation of between €20-€50 (c $20-$40) will be paid, depending on the model. Consumers can also receive an additional €45 (c $45.10) if they can provide evidence of incremental "specific potential losses." The total payment per household is capped at €95 (c $95.20).

HP, which has always maintained it uses the Dynamic Security to protect its IP and maintain the integrity of its printers, told us via an emailed statement: "HP is pleased to have reached an amicable agreement with Euroconsumers. The settlement avoids any legal action and reflects both organizations’ commitment to work for the benefit of consumers."

A big focus for HP since late 2019 is driving up the bottom line of its print business. The path was, of course, to charge higher upfront prices for hardware that is able to use third party cartridges to avoid a situation where HP is subsidizing the box when it is unable to claw back more profits from supplies. And it is also selling printers that come pre-loaded with HP supplies. ®