Printer manufacturer HP will pay more than $100,000 in compensation to customers after admitting it secretly introduced software that prevented the use of ink cartridges made by rival companies.

HP has admitted to the consumer watchdog that it engaged in misleading or deceptive conduct by not warning customers that some of its inkjet printers included technology that prevented the use of almost all ink cartridges other than its own.

Some products were sold with the feature installed, while others had it applied as a firmware update.

The printers started falsely claiming in September 2016 that non-HP ink cartridges were damaged.

Australian Competition and Consumer Commission deputy chair Michael Schaper said customers were denied the choice to accept or reject the restricting technology.

"The ACCC was also very concerned that HP used technology to change these printers' functionality after purchase, without alerting consumers to the restriction on the use of non-HP ink cartridges which was being installed," he said in a statement.

HP will offer $50 to the more than 2,000 affected owners of the ten models of OfficeJet printers that featured the technology.

Customers have until August 13 to apply for the compensation on the HP website.

An update to remove the ink restriction software has been available since October 2016.

HP will also now inform all consumers of any restriction on the use of non-HP ink cartridges.

It is the second time in five years that HP has conceded it likely broke consumer law.

It was ordered to pay a $3 million civil penalty for false or misleading claims about warranties and replacement guarantees in 2013.