2 weeks Ago By Iain Thomson
HP Inc has agreed to pay $4 million to settle a class-action lawsuit in the US that alleged it used deceptive pricing tactics on its website, including fake discounts and misleading limited-time offers. As a result, customers who bought specific PC models [PDF], as well as some mice and keyboards, between June 5, 2021, and October 28, 2024, may be able to get a few bucks back, assuming the judge approves the settlement and affected customers file the necessary claim form. HP did not admit any wrongdoing as part of the deal.
The dispute began on September 7, 2021, when Rodney Carvalho purchased a desktop PC from HP Inc's website for $899.99, advertised as $100 off the regular price of $999.99.
However, he alleged in a lawsuit – brought against the computer titan in California a year later – that HP had been selling the same model at $899.99 for months, making the advertised discount misleading. His lawsuit also alleges HP falsely advertised limited availability by featuring Carvalho's computer in a "Weekly Deal" section on its site with a claim that there was "Only 1 Left!" - yet continued selling the same model for weeks afterward, minus the urgent language.
"By using misleading strikethrough prices to artificially increase the perceived value of HP products, HP harms consumers by inducing them to pay more for its products and make purchases they would not have otherwise made," Carvalho's lawsuit [PDF] claims. "HP’s strikethrough prices also harm competition by giving HP an unfair advantage over other computer manufacturers that do not engage in false reference pricing. After all, a customer is more likely to purchase a $2,000 computer advertised at 50 percent off its regular price than pay full price for a $1,000 computer," alleges the complaint.
According to court filings, HP offers around 350 laptop and desktop models for sale on its website at any given time, with more than a third advertised as being marked down from a strikethrough price. But the complaint alleges that most of these reference prices are misleading, as the products were rarely, if ever, sold at the higher price - a pattern that also applies to HP's monitors, printers, accessories, and warranties. HP was also accused of keeping a Spectre X360 laptop in the "Weekly Deal" section of its site for weeks at a time.
The same model was later promoted as a Memorial Day Special in both May and June, and according to the lawsuit, HP even raised the strikethrough price by $50 in July, then continued to offer it at $899 by applying a fresh $50 discount. Carvalho was later joined by another named plaintiff, Mark Maher, and together they filed a class action on behalf of other HP Inc customers who allegedly encountered similar pricing tactics. The lawsuit claims violations of California's Consumers Legal Remedies Act, the state's False Advertising Law, and the Unfair Competition Law, as well as unjust enrichment.
After nearly three years of litigation, HP has now agreed [PDF] to a settlement fund for customers who bought certain HP products advertised with allegedly misleading discounts. According to the settlement, this includes [PDF] specific Pavilion, Envy, Spectre and other PC models, as well as some mice and keyboards, that were advertised as on sale more than 75 percent of the time they were offered during the class period. If the court signs off, lawyers can pocket up to $1 million from the settlement fund in fees and expenses, while the two named plaintiffs may each collect up to $5,000 for their efforts.
As for everyone else, with about $3 million to be split among a sprawling class, expect your slice to cover a cup of coffee. Maybe. Under the settlement terms, HP, the named plaintiffs, and their attorneys agreed not to issue press releases or speak to the media about the settlement, unless required by law or ordered by the court.
HP's profit in its latest fiscal year was about $2.8 billion , so the $4 million settlement represents roughly 13 hours of annual net income for the ink-slinger and peripherals pusher. Just another cost-of-doing-business fine that US firms barely notice.
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