For years, Hewlett-Packard has waged a quiet war against its own customers. The weapon: firmware updates designed to disable printers when owners insert third-party ink cartridges. The strategy generated billions in recurring revenue. Now, a proposed settlement with the Federal Trade Commission threatens to dismantle one of the most profitable lock-in schemes in consumer electronics history.
The FTC’s proposed consent order, announced in late March 2026, would require HP to restore full functionality to printers that were degraded by firmware updates blocking non-HP cartridges. It would also bar the company from deploying similar restrictions in the future — at least without extraordinarily clear disclosure before purchase. The settlement stems from a complaint alleging HP engaged in unfair and deceptive practices by pushing updates that rendered third-party cartridges useless, often without adequate warning to consumers who had already bought the hardware.
This isn’t a slap on the wrist. It’s an existential challenge to a business model.
The Razor-and-Blades Machine That Printed Money
HP’s printer division has long operated on the classic razor-and-blades model: sell the hardware cheap, then extract profits from consumables. Ink cartridges carry some of the highest margins in consumer technology. HP ink, ounce for ounce, has historically cost more than vintage champagne. More than Chanel No. 5. The company’s Printing segment generated $16.6 billion in net revenue in fiscal year 2024, and supplies — ink and toner — account for the lion’s share of that division’s profitability.
To protect this stream, HP deployed what it called “dynamic security” — firmware that checks whether a cartridge carries a genuine HP security chip. Cartridges without the chip are rejected. Updates pushed to printers over the internet could retroactively disable third-party cartridges that had been working fine for months. Consumers would wake up to error messages on machines they owned outright.
As Ars Technica reported, HP had already faced significant backlash and multiple lawsuits over these practices. A class-action settlement in 2022 cost the company roughly $1.35 million — a rounding error given the revenue at stake. European regulators had also taken notice, with Italian authorities fining HP for similar conduct. But none of those actions carried the structural force of an FTC consent order that mandates behavioral changes going forward.
The pattern was consistent. HP would push a firmware update. Third-party cartridges would stop working. Customers would complain. HP would sometimes reverse course, sometimes not. And then it would happen again.
The FTC complaint specifically cited instances where HP’s marketing materials touted printer compatibility without disclosing that future firmware updates could restrict cartridge choices. Consumers made purchasing decisions based on incomplete information. That’s the core of the deception allegation — not that HP sold its own ink, but that it sold hardware under one set of implied promises and then changed the terms after the transaction.
The proposed order requires HP to clearly and conspicuously disclose any cartridge restrictions at the point of sale. Not buried in terms of service. Not in fine print. Front and center, before a consumer hands over money. And for printers already sold, HP must provide a way to restore functionality that was taken away by prior updates.
That last provision is the one that stings most.
Restoring functionality means HP would need to roll back firmware or provide updates that re-enable third-party cartridge compatibility on millions of printers already in homes and offices. The logistical challenge is real. The financial implications are substantial. Every printer that starts accepting cheaper third-party ink is a printer generating less recurring revenue for HP.
A Broader Reckoning With the Right to Repair
The HP case doesn’t exist in isolation. It sits at the intersection of consumer protection law and a growing political consensus — rare in its bipartisanship — that manufacturers shouldn’t be able to cripple products after sale. The right-to-repair movement has scored legislative victories in multiple states, with laws now on the books in California, New York, Minnesota, Colorado, and Oregon, among others. The FTC itself signaled its intent to police repair restrictions in a 2021 report to Congress, and the HP action represents one of the most concrete enforcement steps since.
John Davisson, senior counsel at the Electronic Privacy Information Center, told Ars Technica that the case “sends a message that using software updates to degrade a product people already bought is a form of unfair dealing.” That framing matters. If firmware-based lock-in constitutes an unfair practice under Section 5 of the FTC Act, the implications extend far beyond printers. Agricultural equipment manufacturers, medical device companies, and automotive firms all employ similar strategies to varying degrees.
HP, for its part, has pushed back on the characterization. The company has argued that dynamic security protects consumers from counterfeit cartridges that could damage printers or produce inferior output. There’s a kernel of truth there — counterfeit electronics can pose genuine risks. But the FTC’s position is that the remedy HP chose was disproportionate and deceptive, not that quality concerns are illegitimate.
The third-party ink market is sizable. Companies like LD Products, Inkjets.com, and various Amazon-marketplace sellers offer compatible cartridges at a fraction of HP’s prices — often 50% to 80% less. For a household printing moderately, the savings can amount to hundreds of dollars per year. For small businesses running multiple printers, the math is even more compelling. HP’s dynamic security didn’t just protect against counterfeits; it protected against legitimate competition.
And the competition knew it. Several third-party cartridge manufacturers had been engaged in a perpetual cat-and-mouse game with HP’s firmware, reverse-engineering security chips only to have HP push new updates that blocked the workarounds. The FTC order, if finalized, would largely end this cycle by prohibiting HP from using firmware to disable cartridges that don’t carry its security chip — unless the restriction is disclosed with unmistakable clarity before purchase.
Wall Street has been watching. HP’s stock dipped modestly on the announcement, reflecting investor concern about the long-term impact on supplies revenue. Analysts at Citi noted in a March research note that supplies represent roughly two-thirds of the Printing segment’s operating profit, and any structural shift toward third-party ink adoption could compress margins meaningfully. But other analysts argued the market had already been pricing in regulatory risk, and that HP’s ongoing pivot toward subscription services — its Instant Ink program, which ships cartridges automatically based on usage — could partially offset the impact.
The Instant Ink program is itself a fascinating case study. Under the subscription model, customers pay a monthly fee based on pages printed, not cartridges consumed. HP ships ink proactively. If you cancel, the cartridges stop working. The FTC settlement doesn’t directly address subscription models, but the disclosure requirements could force HP to be far more transparent about what happens when a subscriber leaves the program.
There’s an irony here. HP’s aggressive defense of its ink monopoly may have accelerated the very regulatory scrutiny it sought to avoid. Had the company pursued a more moderate approach — competing on quality and convenience rather than firmware lockouts — it might never have attracted FTC attention. Instead, the escalating pattern of firmware updates, consumer outrage, partial rollbacks, and renewed restrictions created a paper trail that regulators found compelling.
The proposed consent order is subject to a 30-day public comment period before the FTC votes on final approval. Consumer advocacy groups are expected to file supportive comments. HP will likely push for modifications that preserve some ability to warn consumers about non-genuine cartridges, even if it can’t outright block them. The final order could include compromise language — perhaps allowing HP to display a warning message without actually disabling the cartridge.
But the direction is clear.
What Comes Next for HP — and Everyone Else
HP now faces a strategic inflection point. The company can continue to fight the FTC in hopes of weakening the consent order’s terms, or it can accelerate its transition toward business models that don’t depend on hardware lock-in. The subscription model is one path. Another is competing more aggressively on ink pricing, narrowing the gap with third-party alternatives enough to retain customers on convenience and brand trust alone. A third option — one HP has been exploring — is selling higher-margin printers upfront and abandoning the subsidized-hardware model entirely.
In 2024, HP launched a line of printers with no subscription requirement and higher sticker prices, marketed as offering lower total cost of ownership. The reception was mixed. Consumers accustomed to $49 printers experienced sticker shock at $200-plus devices, even when the long-term economics favored the pricier option. Behavioral economics is stubborn.
For the broader technology industry, the HP case establishes a template. The FTC has now demonstrated willingness to treat post-sale firmware restrictions as potentially unfair practices. Companies that sell hardware and then use software updates to limit consumer choice — whether in printers, tractors, smartphones, or smart home devices — should take note. The legal theory isn’t novel, but its application to firmware-based product degradation is newly concrete.
So where does this leave the average consumer with an HP printer sitting on their desk? In the short term, not much changes. The consent order isn’t final. Even after finalization, HP will have a compliance timeline to implement the required changes. But in the medium term, the promise is significant: a printer that works with whatever ink you put in it, the way it did when you bought it.
That shouldn’t be a radical proposition. For decades, it apparently was.
The FTC’s action against HP won’t fix every broken incentive in the printer industry. It won’t eliminate the razor-and-blades model overnight. But it draws a line. Sell your hardware however you want. Price your ink however the market will bear. Just don’t sabotage the machine after the sale.
HP printed this problem for itself. Now it has to live with the output.
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