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Static raises serious concerns over VA

January 12, 2021

In a letter, commenting to the on the EU Commission presentation of the Industry Voluntary Agreement to improve the environmental performance of imaging equipment and consumables, Static Control says that “the presentation of the proposed draft VA and explanations thereof did not address the serious concerns raised by Static Control and others present”.

Static Control wrote the letter in response to the call for comments on the proposed Voluntary Agreement (VA) on Imaging Equipment at the conclusion of the meeting on 9 December 2020.

In its comments the company says that “regarding the way the negotiations leading up to the proposal were not sufficiently transparent and that the proposal itself distorts competition in the markets for printer consumables as well in the upstream markets for components.”

The letter continues: “Static Control is alarmed by the anticompetitive barriers to entry to becoming a Supporting Signatory of the VA as set forth in Section 9 and Annex A of the VA. During comment period, other stakeholders expressed similar concerns and questioned the basis for how certain criteria supported the stated objective to achieve a circular economy.

“In particular, stakeholders echoed Static Control’s concern about the requirements for a Supporting Signatory to have a “substantial operational establishment within the EU” and for “Remanufactured Cartridges, Refilled Cartridges, Remanufactured Containers and Refilled Containers must make up at least 80% of all Cartridge and Container units produced or made available by a Supporting Signatory”.

Stakeholders questioned the definition of the term of a “substantial operational establishment in the EU”. The presenters waivered on a direct answer alternating between revenue and physical establishment requirements, illuminating the subjectivity and discriminatory nature of the criteria. Stakeholders equally questioned the requirement for 80% remanufactured or refilled consumable of the Supporting Signatories range as most smaller remanufacturers sell components and new build cartridges to fill out their product range.”

One of the points Static Control makes in its letter is that during the meeting, “the representative of the remanufacturers admitted that very “few remanufacturers are actually Supporting Signatories,” thus evidencing that the large remanufacturers have been the ones to dictate who can join their ranks as Supporting Signatories.”

One major issue within the aftermarket is firmware updates that lock out third-party cartridges. So addressing this, Static says in its letter: “This is especially troubling because the exceptions to the design commitments that allow for the continuation of the OEM business models, including firmware updates that lock out aftermarket remanufactured products, apply only to Supporting Signatories with whom the OEMs have entered into bilateral agreements (“BA”).

“On slide 18 of the 9 December 2020 presentation, the first bullet states “The VA is designed to support remanufacturing of OEM cartridges using OEM circuitry.”3 Slide 18 further goes on to state that the “VA requires OEMS to offer solutions to Supporting Signatories.”4 Therefore, if a remanufacturer is not a Supporting Signatory and does not have a BA with an OEM, then that remanufacturer is prevented from fairly competing with Supporting Signatories.”

The letter concludes: “The European Commission now must decide whether this industry VA is a valid alternative to an implementing measure under the Ecodesign Directive. For the reasons stated herein, Static Control believes that the VA lacks ambition and is not fit for purpose. As currently proposed, the VA allows for the EU Commission to be viewed to condone and approve anticompetitive practices.

“Static Control again urges DG ENER not to accept the proposed VA as a valid alternative to an implementing regulation under the Ecodesign Directive at least until appropriate revisions have been made to the VA to ensure such FRAND access. Static Control requests the DG ENER to initiate a procedure under the Ecodesign Directive to ensure a fair and considered process to achieve its commendable objectives of a circular economy with respect to toner and ink cartridges.”

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