Grey marketing is great - if you're the importer...

Old rag blues

The old-school exemplar was Levi's jeans, which were middle-of-the-road stuff in the US, but marketed in Europe as being near designer quality – with prices to match. Thus the dozen pairs everyone brought back from New York on Freddie Laker's Skytrain, as if we were nipping over the Berlin Wall or something. There are more modern examples as well: there's a low-cost Brazilian version of Windows that turns up on low-end Portuguese PCs for example.

So how has the EU tried to deal with this conundrum? Not all that well unfortunately. For they've continued to insist that there must be free movement within the EU: as the various treaties insist. But to allow some segmentation, they've decided to allow copyright and trademark law to be used as a restriction. This is old but describes the basics. E-Bay was complaining about this here at El Reg.

For cars, as an example, the EU positively encourages parallel imports. Yes, please do go and buy your car in France or Denmark and the local authorities must indeed register it without excessive charges in your home country. Similarly with fags and booze: but then these are classified as personal imports. Larger-scale imports for commercial resale come under a different set of rules (on fags and booze for example, tax of the country of destination must be charged, obviating the point).

Where it's not tax arbitrage being involved, there's still a way in which producers can segment their market. That is to deny the grey importer the use of the necessary trademarks. In one importer's case, the EU ended up saying, in essence: "Of course you can bring in and sell these lovely games-playing computers: you're just not allowed to mention the word “Playstation”, that being a trademark". Of course, “lovely games-playing computer” is not a product description that gets them flying off the shelves.

The law is unclear precisely because it is trying to balance two incompatible desires: to have a single market and yet to allow producers to distinguish themselves in said market. The authorised distributor can't come down like a tonne of bricks on an unauthorised one: for what are they doing wrong? But the unauthorised one has to be very careful indeed in not trampling over any copyrights or trademarks, for the way these are defined, the manufacturer still has control over their use.

In the end though, whatever the legal structure, such grey imports will never be entirely stopped. Here's what Fei Lam was actually shipping to his customers. Over 7,000 people were willing to do that to their shiny new $599 piece of kit? Sheesh.

By the way, anyone know anyone at Foxconn? ®