There are numerous manufacturers of similar printers, fax machines, and copiers, so the markets for these businesses are far from monopolistic. Nevertheless, manufacturers are careful to design each model so that it will accept only ink and toner cartridges with a very specific size and shape. In this way, once a consumer has purchased a machine, the manufacturer can operate as a monopolistic seller of replacement ink and toner cartridges. For many of these machine manufacturers, sales of these cartridges, which generate $40 billion in revenues from worldwide sales, account for more than 50 percent of total revenues.

In recent years, thousands of new firms have entered the market for ink and toner cartridges. These firms collect used, empty cartridges, which they repair, refill with ink or toner, and resell at lower prices than those charged by the original manufacturers. Estimates indicate that since 1998, their share of sales in the market for ink and toner cartridges has increased from 5 to 20 percent. To stifle this competition, many manufacturers of business machines now produce ink and toner cartridges containing microchips. When a cartridge is replaced, the microchips cease to function, and the cartridge can no longer communicate with the host machine. Enterprising competitors responded by figuring out how to repair or replace the microchips. Now, several court battles are under way to determine whether these outside competitors have violated copyright protections of digital codes imprinted on the microchips. Even as these cases proceed, business machine manufacturers are developing new microchips that will be harder to repair or reproduce.

Why are manufacturers of printers, fax machines, and copiers currently fighting to overturn a European Union environmental protection rule requiring all ink and toner cartridges to be recyclable?