Grey market
Encyclopedia
A grey market or gray market also known as parallel market is the trade of a commodity through distribution channels which, while legal, are unofficial, unauthorized, or unintended by the original manufacturer. The term gray economy, however, refers to workers being paid under the table, without paying income taxes or contributing to such public services as Social Security and Medicare. It is sometimes referred to as the underground economy
or "hidden economy."
A black market is the trade of goods and services that are illegal in themselves and/or distributed through illegal channels, such as the selling of stolen goods, certain drugs or unregistered handguns.
The two main types of grey market are imported manufactured goods that would normally be unavailable or more expensive in a certain country and unissued securities that are not yet traded in official markets. Sometimes the term dark market is used to describe secretive, unregulated (though often technically legal) trading in commodity futures, notably crude oil in 2008. This can be considered a third type of "grey market" since it is legal, yet unregulated, and probably not intended or explicitly authorized by oil producers.
occurs when the price of an item is significantly higher in one country than another. This situation commonly occurs with electronic equipment such as camera
s. Entrepreneurs buy the product where it is available cheaply, often at retail but sometimes at wholesale, and import it legally to the target market. They then sell it at a price high enough to provide a profit but under the normal market price.
International efforts to promote free trade
, including reduced tariff
s and harmonized national standards, facilitate this form of arbitrage
whenever manufacturers attempt to preserve highly disparate pricing. Because of the nature of grey markets, it is difficult or impossible to track the precise numbers of grey-market sales. Grey-market goods are often new, but some grey market goods are used goods
. A market in used goods is sometimes nicknamed a Green Market.
Importing certain legally restricted items such as prescription drugs or firearms would be categorized as black market, as would smuggling the goods into the target country to avoid import duties. A related concept is bootleg
ging, the smuggling or transport of highly regulated goods, especially alcoholic beverage
s. The term "bootlegging" is also often applied to the production or distribution of counterfeit
or otherwise infringing
goods.
Grey markets can sometimes develop for select video game consoles and titles whose demand temporarily outstrips supply and the local shops run out of stock, this happens especially during the holiday season. Other popular items, such as doll
s can also be affected. In such situations the grey market price may be considerably higher than the manufacturer's suggested retail price. Online auction sites such as eBay
have contributed to the emergence of the video game grey market.
, particularly in the European Union. Manufacturers or their licensees often seek to enforce trademark
or other intellectual-property
rights against the grey market. Such rights may be exercised against the import, sale and/or advertisement of grey imports. In 2002, Levi Strauss
, after a 4-year legal fight, prevented UK supermarket Tesco
from selling grey market jeans. However, such rights can be limited. Examples of such limitations include the first-sale doctrine
in the United States and the doctrine of the exhaustion of rights in the European Union.
When grey-market products are advertised on Google
, eBay or other legitimate web sites, it is possible to petition for removal of any advertisements that violate trademark or copyright laws. This can be done directly, without the involvement of legal professionals. eBay, for example, will remove listings of such products even in countries where their purchase and use is not against the law. Manufacturers may refuse to supply distributors and retailers (and with commercial products, customers) that trade in grey-market goods. They may also more broadly limit supplies in markets where prices are low. Manufacturers may refuse to honor the warranty of an item purchased from grey-market sources, on the grounds that the higher price on the non-grey market reflects a higher level of service even though the manufacturer does of course control their own prices to distributors. Alternatively, they may provide the warranty service only from the manufacturer's subsidiary in the intended country of import, not the diverted third country where the grey goods are ultimately sold by the distributor or retailer. This response to the grey market is especially evident in electronics goods. Local laws (or customer demand) concerning distribution and packaging (for example, the language on labels, units of measurement, and nutritional disclosure on foodstuffs) can be brought into play, as can national standards certifications for certain goods.
Manufacturers may give the same item different model numbers in different countries, even though the functions of the item are identical, so that they can identify grey imports. Manufacturers can also use batch codes to enable similar tracing of grey imports. Parallel market importers often de-code the product in order to avoid the identification of the supplier. In the United States, courts have decided that decoding which blemishes the product is a material alteration, rendering the product infringed. Parallel market importers have worked around this limitation by developing new removal techniques.
The development of DVD region code
s, and equivalent regional-lockout
techniques in other media, are examples of technological features designed to limit the flow of goods between national markets, effectively fighting the grey market that would otherwise develop. This enables movie studios and other content creators to charge more for the same product in one market than in another or alternatively withhold the product from some markets for a particular time. Consumer advocacy groups argue that this discrimination against consumers—the charging of higher prices on the same object simply because of where they happen to live—is unjust and anti-competitive. Since it requires governments to legislate to prevent their citizens from purchasing goods at cheaper prices from other markets, and since this is clearly not in their citizens' interests, many governments in democratic countries have chosen not to protect anti-competitive technologies such as DVD region-coding.
securities that are not not listed, traded or quoted on any U.S. stock exchange
or the OTC markets are sometimes purchased or sold over the counter (OTC) via the grey market. Grey market securities have no market makers quoting the stock. Since grey market securities are not traded or quoted on an exchange or interdealer quotation system, investor's bids and offers are not collected in a central spot so market transparency is diminished and best execution of orders is difficult.
. In the United Kingdom the term applies to vehicles imported either new from cheaper European countries or from Japanese domestic models imported secondhand from Japan or Singapore, which both have strict laws against older cars. This importation of secondhand models from Japan/Singapore tends to involve sports models that were never released in the UK or models that fetch a high price in the UK because of their performance or status. Although some grey imports are a bargain, some buyers have discovered that their vehicles do not meet British regulations or that parts and service are hard to come by because these cars are different from the versions sold new in the UK.
In New Zealand, grey market vehicles comprise a majority of cars in the national fleet. These secondhand imports have achieved 'normal' status and are used and serviced without comment throughout society. A huge industry servicing and supplying parts for these vehicles has developed. After years of trying to stop grey imports the car companies themselves have become involved, importing in competition with their own new models. Russia and many African countries (excluding South Africa, where second-hand car imports are prohibited) have massive fleets imported secondhand from Japan.
The driving forces behind a heavily active mobile phone grey market include currency fluctuations, customers demands, manufacturers policies and price variations. It is not uncommon for grey market traders to introduce a product into a market months in advance of the official launch. This was evident with the launch of the iPhone 4, where international grey market traders bought large quantities at Apple’s retail price then shipped to countries where the product was not available adding a substantial margin to the resale price.
's Steam, simply requires entering a valid CD key to associate with an account. In 2007, after the release of The Orange Box
, Valve deactivated accounts with CD keys that were purchased outside of the consumer's territory in order to maintain the integrity of region-specific licensing
. This generated complaints from North American customers who had circumvented their Steam end-user license agreement by purchasing The Orange Box through cheaper, market retailers.
with dealers importing directly from lower taxed states and selling at a lower price, creating competition against a local authorised distributor
. Grey sets, as colloquially called, are often comparable to authorised imports. Lenses
or flash
units of parallel imports often only differ by the warranty provided, and since the grey sets were manufactured for another state, photographic equipment manufacturers often offer local warranty
, instead of international warranty, which will render grey sets ineligible for warranty claims with the manufacturer. Because of the nature of local warranties, importers of grey sets usually offer their own warranty schemes with reduced benefits or lasting a shorter period of time. Grey sets do not differ particularly from an authorised import. They look and function identically, apart from the manufacturer's warranties having been voided. In the salad days of camera sales during the 60s and 70s, when the latter were made of satin chrome outside and brass inside and lenses had amber coating, the bargain basements for Japanese equipment were Hong Kong and Singapore, through which goods were channelled to European shop windows bypassing the often substantial levy of the official importers. World-market pricing and the Internet have largely eliminated this today and certainly the two former sources, that have become expensive if anything. With the dollar in a permanent state of anemia, the cheapest source is probably the USA, a market highly esteemed by manufacturers albeit with a murderous state of competition because of consumer-happy, if highly diligent, bargain hunters. This has led Canon to give their hard-selling DSLR cameras names like "Rebel" in the USA and "EOS" outside it, aimed at preventing the competitively priced US-merchandise reaching Europe where sales are slower but achieve profit higher.
and satellite television
delivery.
The most common form is companies reselling the equipment and services of a provider not licensed to operate in the market. For instance, a Canadian
consumer who wants access to American
television and radio services that are not available in Canada may approach a grey market reseller of Dish Network
or DirecTV
. There is also a grey market in the United States for Canadian satellite services such as Bell TV or Shaw Direct.
In Europe
some satellite TV services are encrypted for rights reasons, as they are only entitled to broadcast films, sporting events and US entertainment programming in a certain country or countries, hence only residents of the UK
and Ireland
may subscribe to Sky Digital. In other European countries with large British expatriate
populations, such as Spain
, Sky is widely available. Although Sky does not condone the use of its viewing cards outside the UK or Ireland, and has the technology to render them invalid, many people continue to use them.
Illegitimate importing of "free-to-view
" Sky cards from the UK to Ireland is often done so that Irish Sky customers can receive Channel 5 and some of the other channels not generally available via Sky in the Republic because of rights issues. Irish Sky viewing cards, which allow viewing of Irish terrestrial channels, are imported into the UK. Northern Ireland
residents subscribing to Sky can watch RTÉ
One
and Two
and TG4
, although not TV3
, which carries many of the same programmes as ITV
, a lot of the programmes airing before ITV
can show them.
It is also becoming increasingly common in the UK for some pub
s to use satellite decoder cards from Greece
, Norway
, Poland
or the Arab world
to receive satellite TV broadcasting live English football matches from those countries. Alternatively, they may use cards which allow pirate decryption
of scrambled signals. Such cards are typically much cheaper than the cards available in the UK from Sky (who charge extra fees for public showing licenses). However, Sky has taken civil and criminal action against some who do this. Two recent cases involving grey cards have been referred to the European Court of Justice. The suppliers of grey cards and Karen Murphy have won their cases at the European Court of Justice. The judges have ruled that right holders cannot license their content on a exclusive territorial basis as it breaches EU Law on competition and free movement of goods and services. However, whilst this ruling allows domestic viewers to subscribe to foreign satellite services, pubs may still need permission from right holders such as the Premier League to broadcast content. This is because certain elements of the broadcast such as branding are copyrighted. The matter now rests on the High Court to incorporate the ruling into UK Law. C-403/08 - 2011-10-04 - Football Association Premier League and Others
tobacco remains legal in Sweden
due to a special agreement, but illegal elsewhere in Europe. Import for personal consumption is legal, but import for resale is illegal, although often practiced.
The content of these books is said to differ from the content needed for universities in North America. The content is usually 98% identical to what is taught in different areas of the world. Most commonly the units of measure, spelling of certain words and/or grammar is that of the region it was intended for. Sometimes the editions are not the newest.
For example, a $160 math, chemistry or biology book in Canada, US or Britain could easily be acquired for 10 to 20% of the cost in Asia. The content is identical, the only discernible differences are thinner pages and a soft cover. Most text books are absolutely identical these days except for the quality of the paper and binding, though this has been greatly improved in India by the import of modern manufacturing equipment. Indian Booksellers however, are unwilling to fulfil foreign purchase orders, which means that a local individual is needed to buy the books on his account and ship them, a worthwhile practice for any inter-university cooperation..
These books typically contain a disclaimer stating that importation is not permitted. However, the 1998 U.S. Supreme Court
decision Quality King v. L'anza protects the reimportation of copyrighted materials under the first-sale doctrine
. Note that this decision does not apply to books manufactured outside the US.
Underground economy
A black market or underground economy is a market in goods or services which operates outside the formal one supported by established state power. Typically the totality of such activity is referred to with the definite article as a complement to the official economies, by market for such goods and...
or "hidden economy."
A black market is the trade of goods and services that are illegal in themselves and/or distributed through illegal channels, such as the selling of stolen goods, certain drugs or unregistered handguns.
The two main types of grey market are imported manufactured goods that would normally be unavailable or more expensive in a certain country and unissued securities that are not yet traded in official markets. Sometimes the term dark market is used to describe secretive, unregulated (though often technically legal) trading in commodity futures, notably crude oil in 2008. This can be considered a third type of "grey market" since it is legal, yet unregulated, and probably not intended or explicitly authorized by oil producers.
Description
Unlike black market goods, grey-market goods are legal. However, they are sold outside normal distribution channels by companies which may have no relationship with the producer of the goods. Frequently this form of parallel importParallel import
A parallel import is a non-counterfeit product imported from another country without the permission of the intellectual property owner. Parallel imports are often referred to as grey product, and are implicated in issues of international trade, and intellectual property.The practice of parallel...
occurs when the price of an item is significantly higher in one country than another. This situation commonly occurs with electronic equipment such as camera
Camera
A camera is a device that records and stores images. These images may be still photographs or moving images such as videos or movies. The term camera comes from the camera obscura , an early mechanism for projecting images...
s. Entrepreneurs buy the product where it is available cheaply, often at retail but sometimes at wholesale, and import it legally to the target market. They then sell it at a price high enough to provide a profit but under the normal market price.
International efforts to promote free trade
Free trade
Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ from...
, including reduced tariff
Tariff
A tariff may be either tax on imports or exports , or a list or schedule of prices for such things as rail service, bus routes, and electrical usage ....
s and harmonized national standards, facilitate this form of arbitrage
Arbitrage
In economics and finance, arbitrage is the practice of taking advantage of a price difference between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices...
whenever manufacturers attempt to preserve highly disparate pricing. Because of the nature of grey markets, it is difficult or impossible to track the precise numbers of grey-market sales. Grey-market goods are often new, but some grey market goods are used goods
Used goods
A second-hand or used good is one that is being purchased by or otherwise transferred to a second or later end user. A used good can also simply mean it is no longer in the same condition as it was when it was first transferred to the current end user...
. A market in used goods is sometimes nicknamed a Green Market.
Importing certain legally restricted items such as prescription drugs or firearms would be categorized as black market, as would smuggling the goods into the target country to avoid import duties. A related concept is bootleg
Rum-running
Rum-running, also known as bootlegging, is the illegal business of transporting alcoholic beverages where such transportation is forbidden by law...
ging, the smuggling or transport of highly regulated goods, especially alcoholic beverage
Alcoholic beverage
An alcoholic beverage is a drink containing ethanol, commonly known as alcohol. Alcoholic beverages are divided into three general classes: beers, wines, and spirits. They are legally consumed in most countries, and over 100 countries have laws regulating their production, sale, and consumption...
s. The term "bootlegging" is also often applied to the production or distribution of counterfeit
Counterfeit
To counterfeit means to illegally imitate something. Counterfeit products are often produced with the intent to take advantage of the superior value of the imitated product...
or otherwise infringing
Copyright infringement
Copyright infringement is the unauthorized or prohibited use of works under copyright, infringing the copyright holder's exclusive rights, such as the right to reproduce or perform the copyrighted work, or to make derivative works.- "Piracy" :...
goods.
Grey markets can sometimes develop for select video game consoles and titles whose demand temporarily outstrips supply and the local shops run out of stock, this happens especially during the holiday season. Other popular items, such as doll
Doll
A doll is a model of a human being, often used as a toy for children. Dolls have traditionally been used in magic and religious rituals throughout the world, and traditional dolls made of materials like clay and wood are found in the Americas, Asia, Africa and Europe. The earliest documented dolls...
s can also be affected. In such situations the grey market price may be considerably higher than the manufacturer's suggested retail price. Online auction sites such as eBay
EBay
eBay Inc. is an American internet consumer-to-consumer corporation that manages eBay.com, an online auction and shopping website in which people and businesses buy and sell a broad variety of goods and services worldwide...
have contributed to the emergence of the video game grey market.
Responses
The parties most concerned with the grey market are usually the authorized agents or importers, or the retailers of the item in the target market. Often this is the national subsidiary of the manufacturer, or a related company. In response to the resultant damage to their profits and reputation, manufacturers and their official distribution chain will often seek to restrict the grey market. Such responses can breach competition lawCompetition law
Competition law, known in the United States as antitrust law, is law that promotes or maintains market competition by regulating anti-competitive conduct by companies....
, particularly in the European Union. Manufacturers or their licensees often seek to enforce trademark
Trademark
A trademark, trade mark, or trade-mark is a distinctive sign or indicator used by an individual, business organization, or other legal entity to identify that the products or services to consumers with which the trademark appears originate from a unique source, and to distinguish its products or...
or other intellectual-property
Intellectual property
Intellectual property is a term referring to a number of distinct types of creations of the mind for which a set of exclusive rights are recognized—and the corresponding fields of law...
rights against the grey market. Such rights may be exercised against the import, sale and/or advertisement of grey imports. In 2002, Levi Strauss
Levi Strauss & Co.
Levi Strauss & Co. is a privately held American clothing company known worldwide for its Levi's brand of denim jeans. It was founded in 1853 when Levi Strauss came from Buttenheim, Franconia, to San Francisco, California to open a west coast branch of his brothers' New York dry goods business...
, after a 4-year legal fight, prevented UK supermarket Tesco
Tesco
Tesco plc is a global grocery and general merchandise retailer headquartered in Cheshunt, United Kingdom. It is the third-largest retailer in the world measured by revenues and the second-largest measured by profits...
from selling grey market jeans. However, such rights can be limited. Examples of such limitations include the first-sale doctrine
First-sale doctrine
The first-sale doctrine is a limitation on copyright that was recognized by the Supreme Court of the United States in 1908 and subsequently codified in the Copyright Act of 1976,...
in the United States and the doctrine of the exhaustion of rights in the European Union.
When grey-market products are advertised on Google
Google
Google Inc. is an American multinational public corporation invested in Internet search, cloud computing, and advertising technologies. Google hosts and develops a number of Internet-based services and products, and generates profit primarily from advertising through its AdWords program...
, eBay or other legitimate web sites, it is possible to petition for removal of any advertisements that violate trademark or copyright laws. This can be done directly, without the involvement of legal professionals. eBay, for example, will remove listings of such products even in countries where their purchase and use is not against the law. Manufacturers may refuse to supply distributors and retailers (and with commercial products, customers) that trade in grey-market goods. They may also more broadly limit supplies in markets where prices are low. Manufacturers may refuse to honor the warranty of an item purchased from grey-market sources, on the grounds that the higher price on the non-grey market reflects a higher level of service even though the manufacturer does of course control their own prices to distributors. Alternatively, they may provide the warranty service only from the manufacturer's subsidiary in the intended country of import, not the diverted third country where the grey goods are ultimately sold by the distributor or retailer. This response to the grey market is especially evident in electronics goods. Local laws (or customer demand) concerning distribution and packaging (for example, the language on labels, units of measurement, and nutritional disclosure on foodstuffs) can be brought into play, as can national standards certifications for certain goods.
Manufacturers may give the same item different model numbers in different countries, even though the functions of the item are identical, so that they can identify grey imports. Manufacturers can also use batch codes to enable similar tracing of grey imports. Parallel market importers often de-code the product in order to avoid the identification of the supplier. In the United States, courts have decided that decoding which blemishes the product is a material alteration, rendering the product infringed. Parallel market importers have worked around this limitation by developing new removal techniques.
The development of DVD region code
DVD region code
DVD region codes are a digital-rights management technique designed to allow film distributors to control aspects of a release, including content, release date, and price, according to the region...
s, and equivalent regional-lockout
Regional lockout
Regional lockout is the programming practice, code, chip, or physical barrier used to prevent the playing of media designed for a device from the country where it is marketed on the version of the same device marketed in another country.-Video games:...
techniques in other media, are examples of technological features designed to limit the flow of goods between national markets, effectively fighting the grey market that would otherwise develop. This enables movie studios and other content creators to charge more for the same product in one market than in another or alternatively withhold the product from some markets for a particular time. Consumer advocacy groups argue that this discrimination against consumers—the charging of higher prices on the same object simply because of where they happen to live—is unjust and anti-competitive. Since it requires governments to legislate to prevent their citizens from purchasing goods at cheaper prices from other markets, and since this is clearly not in their citizens' interests, many governments in democratic countries have chosen not to protect anti-competitive technologies such as DVD region-coding.
Stock market securities
Public companyPublic company
This is not the same as a Government-owned corporation.A public company or publicly traded company is a limited liability company that offers its securities for sale to the general public, typically through a stock exchange, or through market makers operating in over the counter markets...
securities that are not not listed, traded or quoted on any U.S. stock exchange
Stock exchange
A stock exchange is an entity that provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and...
or the OTC markets are sometimes purchased or sold over the counter (OTC) via the grey market. Grey market securities have no market makers quoting the stock. Since grey market securities are not traded or quoted on an exchange or interdealer quotation system, investor's bids and offers are not collected in a central spot so market transparency is diminished and best execution of orders is difficult.
Automobiles
Automobile manufacturers segment world markets by territory and price, thus creating a demand for grey import vehiclesGrey import vehicles
Grey import vehicles are new or used motor vehicles and motorcycles legally imported from another country through channels other than the maker's official distribution system...
. In the United Kingdom the term applies to vehicles imported either new from cheaper European countries or from Japanese domestic models imported secondhand from Japan or Singapore, which both have strict laws against older cars. This importation of secondhand models from Japan/Singapore tends to involve sports models that were never released in the UK or models that fetch a high price in the UK because of their performance or status. Although some grey imports are a bargain, some buyers have discovered that their vehicles do not meet British regulations or that parts and service are hard to come by because these cars are different from the versions sold new in the UK.
In New Zealand, grey market vehicles comprise a majority of cars in the national fleet. These secondhand imports have achieved 'normal' status and are used and serviced without comment throughout society. A huge industry servicing and supplying parts for these vehicles has developed. After years of trying to stop grey imports the car companies themselves have become involved, importing in competition with their own new models. Russia and many African countries (excluding South Africa, where second-hand car imports are prohibited) have massive fleets imported secondhand from Japan.
Cell Phones
The emergence of the GSM international standard for cell phones in 1990 prompted the beginning of the Grey Market in the cell phone industry. As global demand for mobile phones grew, so did the size of the parallel market. Today, it is estimate that over 30% of all mobile phones traded will pass through the grey market and that statistic continues to grow. It is impossible to quantify an exact figure, but sources suggest that as many as 500,000 mobile phones are bought and sold outside of official distribution channels through their trading platforms every day.The driving forces behind a heavily active mobile phone grey market include currency fluctuations, customers demands, manufacturers policies and price variations. It is not uncommon for grey market traders to introduce a product into a market months in advance of the official launch. This was evident with the launch of the iPhone 4, where international grey market traders bought large quantities at Apple’s retail price then shipped to countries where the product was not available adding a substantial margin to the resale price.
Computer Games
Purchasing some games from online content distribution systems, such as ValveValve Corporation
Valve Corporation is an American video game development and digital distribution company based in Bellevue, Washington, United States...
's Steam, simply requires entering a valid CD key to associate with an account. In 2007, after the release of The Orange Box
The Orange Box
The Orange Box is a video game compilation for Microsoft Windows, Xbox 360, Mac OS X and PlayStation 3. The Windows and Xbox 360 versions were produced and published by Valve Corporation and released on October 10, 2007 as a boxed retail copy...
, Valve deactivated accounts with CD keys that were purchased outside of the consumer's territory in order to maintain the integrity of region-specific licensing
Regional lockout
Regional lockout is the programming practice, code, chip, or physical barrier used to prevent the playing of media designed for a device from the country where it is marketed on the version of the same device marketed in another country.-Video games:...
. This generated complaints from North American customers who had circumvented their Steam end-user license agreement by purchasing The Orange Box through cheaper, market retailers.
Pharmaceuticals
Some prescription medications, most notably popular and branded drugs, can have very high prices in comparison to their cost of transport. In addition, pharmaceutical prices can vary significantly between countries, particularly as a result of government intervention in prices. As a consequence, the grey market for pharmaceuticals flourishes, particularly in Europe and along the US–Canadian border where Canadians often pay significantly lower prices for US made pharmaceuticals than Americans do.Photographic equipment
Generally regarded as legal in most countries, parallel imports make expensive photographic equipment attractive to savvy users. The grey market in photographic equipment is thriving in highly developed and heavily taxed states like SingaporeSingapore
Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...
with dealers importing directly from lower taxed states and selling at a lower price, creating competition against a local authorised distributor
Distributor
A distributor is a device in the ignition system of an internal combustion engine that routes high voltage from the ignition coil to the spark plugs in the correct firing order. The first reliable battery operated ignition was developed by Dayton Engineering Laboratories Co. and introduced in the...
. Grey sets, as colloquially called, are often comparable to authorised imports. Lenses
Photographic lens
A camera lens is an optical lens or assembly of lenses used in conjunction with a camera body and mechanism to make images of objects either on photographic film or on other media capable of storing an image chemically or electronically.While in principle a simple convex lens will suffice, in...
or flash
Flash (photography)
A flash is a device used in photography producing a flash of artificial light at a color temperature of about 5500 K to help illuminate a scene. A major purpose of a flash is to illuminate a dark scene. Other uses are capturing quickly moving objects or changing the quality of light...
units of parallel imports often only differ by the warranty provided, and since the grey sets were manufactured for another state, photographic equipment manufacturers often offer local warranty
Warranty
In business and legal transactions, a warranty is an assurance by one party to the other party that specific facts or conditions are true or will happen; the other party is permitted to rely on that assurance and seek some type of remedy if it is not true or followed.In real estate transactions, a...
, instead of international warranty, which will render grey sets ineligible for warranty claims with the manufacturer. Because of the nature of local warranties, importers of grey sets usually offer their own warranty schemes with reduced benefits or lasting a shorter period of time. Grey sets do not differ particularly from an authorised import. They look and function identically, apart from the manufacturer's warranties having been voided. In the salad days of camera sales during the 60s and 70s, when the latter were made of satin chrome outside and brass inside and lenses had amber coating, the bargain basements for Japanese equipment were Hong Kong and Singapore, through which goods were channelled to European shop windows bypassing the often substantial levy of the official importers. World-market pricing and the Internet have largely eliminated this today and certainly the two former sources, that have become expensive if anything. With the dollar in a permanent state of anemia, the cheapest source is probably the USA, a market highly esteemed by manufacturers albeit with a murderous state of competition because of consumer-happy, if highly diligent, bargain hunters. This has led Canon to give their hard-selling DSLR cameras names like "Rebel" in the USA and "EOS" outside it, aimed at preventing the competitively priced US-merchandise reaching Europe where sales are slower but achieve profit higher.
Broadcasting
In television and radio broadcasting, grey markets primarily exist in relation to satellite radioSatellite radio
Satellite radio is an analogue or digital radio signal that is relayed through one or more satellites and thus can be received in a much wider geographical area than terrestrial FM radio stations...
and satellite television
Direct broadcast satellite
Direct broadcast satellite is a term used to refer to satellite television broadcasts intended for home reception.A designation broader than DBS would be direct-to-home signals, or DTH. This has initially distinguished the transmissions directly intended for home viewers from cable television...
delivery.
The most common form is companies reselling the equipment and services of a provider not licensed to operate in the market. For instance, a Canadian
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
consumer who wants access to American
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
television and radio services that are not available in Canada may approach a grey market reseller of Dish Network
Dish Network
Dish Network Corporation is the second largest pay TV provider in the United States, providing direct broadcast satellite service—including satellite television, audio programming, and interactive television services—to 14.337 million commercial and residential customers in the United States. Dish...
or DirecTV
DirecTV
DirecTV is an American direct broadcast satellite service provider and broadcaster based in El Segundo, California. Its satellite service, launched on June 17, 1994, transmits digital satellite television and audio to households in the United States, Latin America, and the Anglophone Caribbean. ...
. There is also a grey market in the United States for Canadian satellite services such as Bell TV or Shaw Direct.
In Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
some satellite TV services are encrypted for rights reasons, as they are only entitled to broadcast films, sporting events and US entertainment programming in a certain country or countries, hence only residents of the UK
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
and Ireland
Republic of Ireland
Ireland , described as the Republic of Ireland , is a sovereign state in Europe occupying approximately five-sixths of the island of the same name. Its capital is Dublin. Ireland, which had a population of 4.58 million in 2011, is a constitutional republic governed as a parliamentary democracy,...
may subscribe to Sky Digital. In other European countries with large British expatriate
Expatriate
An expatriate is a person temporarily or permanently residing in a country and culture other than that of the person's upbringing...
populations, such as Spain
Spain
Spain , officially the Kingdom of Spain languages]] under the European Charter for Regional or Minority Languages. In each of these, Spain's official name is as follows:;;;;;;), is a country and member state of the European Union located in southwestern Europe on the Iberian Peninsula...
, Sky is widely available. Although Sky does not condone the use of its viewing cards outside the UK or Ireland, and has the technology to render them invalid, many people continue to use them.
Illegitimate importing of "free-to-view
Free-to-view
Free-to-view is a term used for free of charge and encrypted audio and/or video contents transmission that do not require any form of continual subscription...
" Sky cards from the UK to Ireland is often done so that Irish Sky customers can receive Channel 5 and some of the other channels not generally available via Sky in the Republic because of rights issues. Irish Sky viewing cards, which allow viewing of Irish terrestrial channels, are imported into the UK. Northern Ireland
Northern Ireland
Northern Ireland is one of the four countries of the United Kingdom. Situated in the north-east of the island of Ireland, it shares a border with the Republic of Ireland to the south and west...
residents subscribing to Sky can watch RTÉ
RTE
RTÉ is the abbreviation for Raidió Teilifís Éireann, the public broadcasting service of the Republic of Ireland.RTE may also refer to:* Recep Tayyip Erdoğan, 25th Prime Minister of Turkey...
One
RTÉ One
RTÉ One is the flagship television channel of Raidió Teilifís Éireann , and it is the most popular and most watched television channel in Ireland. It was launched as Telefís Éireann on 31 December 1961, it was renamed RTÉ Television in 1966, and it was renamed as RTÉ One upon the launch of RTÉ...
and Two
RTÉ Two
RTÉ Two is a free-to-air general entertainment channel operated by Irish state broadcaster Raidió Teilifís Éireann. RTÉ Two is available throughout the island of Ireland through digital terrestrial service Saorview, VHF and UHF bands, and is also available via satellite to Irish subscribers of...
and TG4
TG4
TG4 is a public service broadcaster for Irish language speakers. The channel has been on-air since 31 October 1996 in the Republic of Ireland and since April 2005 in Northern Ireland....
, although not TV3
TV3 Ireland
TV3 is a free-to-air commercial television network in the Republic of Ireland. Launched on 20 September 1998 it was Ireland's first commercial broadcaster. The channel is owned by TV3 Group a subsidiary of Doughty Hanson & Co.-The TV3 Group:...
, which carries many of the same programmes as ITV
ITV
ITV is the major commercial public service TV network in the United Kingdom. Launched in 1955 under the auspices of the Independent Television Authority to provide competition to the BBC, it is also the oldest commercial network in the UK...
, a lot of the programmes airing before ITV
ITV
ITV is the major commercial public service TV network in the United Kingdom. Launched in 1955 under the auspices of the Independent Television Authority to provide competition to the BBC, it is also the oldest commercial network in the UK...
can show them.
It is also becoming increasingly common in the UK for some pub
Public house
A public house, informally known as a pub, is a drinking establishment fundamental to the culture of Britain, Ireland, Australia and New Zealand. There are approximately 53,500 public houses in the United Kingdom. This number has been declining every year, so that nearly half of the smaller...
s to use satellite decoder cards from Greece
Greece
Greece , officially the Hellenic Republic , and historically Hellas or the Republic of Greece in English, is a country in southeastern Europe....
, Norway
Norway
Norway , officially the Kingdom of Norway, is a Nordic unitary constitutional monarchy whose territory comprises the western portion of the Scandinavian Peninsula, Jan Mayen, and the Arctic archipelago of Svalbard and Bouvet Island. Norway has a total area of and a population of about 4.9 million...
, Poland
Poland
Poland , officially the Republic of Poland , is a country in Central Europe bordered by Germany to the west; the Czech Republic and Slovakia to the south; Ukraine, Belarus and Lithuania to the east; and the Baltic Sea and Kaliningrad Oblast, a Russian exclave, to the north...
or the Arab world
Arab world
The Arab world refers to Arabic-speaking states, territories and populations in North Africa, Western Asia and elsewhere.The standard definition of the Arab world comprises the 22 states and territories of the Arab League stretching from the Atlantic Ocean in the west to the Arabian Sea in the...
to receive satellite TV broadcasting live English football matches from those countries. Alternatively, they may use cards which allow pirate decryption
Pirate decryption
Pirate decryption most often refers to the reception of compromised pay TV or pay radio signals without authorization from the original broadcaster...
of scrambled signals. Such cards are typically much cheaper than the cards available in the UK from Sky (who charge extra fees for public showing licenses). However, Sky has taken civil and criminal action against some who do this. Two recent cases involving grey cards have been referred to the European Court of Justice. The suppliers of grey cards and Karen Murphy have won their cases at the European Court of Justice. The judges have ruled that right holders cannot license their content on a exclusive territorial basis as it breaches EU Law on competition and free movement of goods and services. However, whilst this ruling allows domestic viewers to subscribe to foreign satellite services, pubs may still need permission from right holders such as the Premier League to broadcast content. This is because certain elements of the broadcast such as branding are copyrighted. The matter now rests on the High Court to incorporate the ruling into UK Law. C-403/08 - 2011-10-04 - Football Association Premier League and Others
Electronics
There is a grey market in electronics in which on line retailers will sell merchandise below the manufacturer's authorized selling price, or advertise below the MAP.Frequent Flyer Miles
Trade or bartering of frequent flyer miles is prohibited by nearly all major airlines. Online exchanges of frequent flyer miles – of which several exist – are also useful examples of grey markets.Snus
SnusSnus
Snus , or Swedish snuff, is a moist powder tobacco product originated from a variant of dry snuff in the early 19th century in Sweden, consumed by placing it under the lip for extended periods of time. The precursor of snus, the dry form of snuff inhaled through the nose, was introduced in Europe...
tobacco remains legal in Sweden
Sweden
Sweden , officially the Kingdom of Sweden , is a Nordic country on the Scandinavian Peninsula in Northern Europe. Sweden borders with Norway and Finland and is connected to Denmark by a bridge-tunnel across the Öresund....
due to a special agreement, but illegal elsewhere in Europe. Import for personal consumption is legal, but import for resale is illegal, although often practiced.
Textbooks
College level textbooks have a grey market, with publishers offering them for lower prices in developing countries or sometimes the UK.The content of these books is said to differ from the content needed for universities in North America. The content is usually 98% identical to what is taught in different areas of the world. Most commonly the units of measure, spelling of certain words and/or grammar is that of the region it was intended for. Sometimes the editions are not the newest.
For example, a $160 math, chemistry or biology book in Canada, US or Britain could easily be acquired for 10 to 20% of the cost in Asia. The content is identical, the only discernible differences are thinner pages and a soft cover. Most text books are absolutely identical these days except for the quality of the paper and binding, though this has been greatly improved in India by the import of modern manufacturing equipment. Indian Booksellers however, are unwilling to fulfil foreign purchase orders, which means that a local individual is needed to buy the books on his account and ship them, a worthwhile practice for any inter-university cooperation..
These books typically contain a disclaimer stating that importation is not permitted. However, the 1998 U.S. Supreme Court
Supreme Court of the United States
The Supreme Court of the United States is the highest court in the United States. It has ultimate appellate jurisdiction over all state and federal courts, and original jurisdiction over a small range of cases...
decision Quality King v. L'anza protects the reimportation of copyrighted materials under the first-sale doctrine
First-sale doctrine
The first-sale doctrine is a limitation on copyright that was recognized by the Supreme Court of the United States in 1908 and subsequently codified in the Copyright Act of 1976,...
. Note that this decision does not apply to books manufactured outside the US.
External links
- The Gray Blog, a blogBlogA blog is a type of website or part of a website supposed to be updated with new content from time to time. Blogs are usually maintained by an individual with regular entries of commentary, descriptions of events, or other material such as graphics or video. Entries are commonly displayed in...
dedicated to law related to the parallel market