Suit charges HP, Staples broke U.S. antitrust law

BOSTON Mon Dec 17, 2007 3:10pm EST

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BOSTON Dec 17 (Reuters) - A U.S. man sued office-products retailer Staples Inc (SPLS.O) and printer manufacturer Hewlett-Packard Co (HPQ.N) in federal court on Monday, charging they broke antitrust laws in collaborating on the sale of replacement ink-jet printer cartridges.

In a lawsuit filed in U.S. District Court in Boston, Ranjit Bedi charged that the two companies had reached "an illegal agreement between competitors to stop competing" when HP paid Staples, the biggest U.S. specialty retailer of office supplies, "market development funds" to stop selling non-HP-branded ink-jet printer cartridges for HP printers.

The suit contends that HP, the world's largest personal computer maker, paid Staples more than $100 million to stop selling lower-priced printer cartridges for HP printers. The suit does not make clear how Bedi, of Pacific Palisades, California, determined the $100 million number.

The suit, which seeks class-action status, claims that the actions violated the Sherman Act and Clayton Act, which prohibit noncompetitive behavior. It seeks unspecified money damages and asks the court to stop HP and Staples from engaging in noncompetitive acts.

Spokesmen for Framingham, Massachusetts-based Staples and Palo Alto, California-based HP both said their companies had not yet seen the suit and declined further comment. (Reporting by Scott Malone; Editing by Tim Dobbyn)

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