Chinese police inspect a warehouse full of counterfeit goods. Photo courtesy Gizmodo.com.
by Bryan Gardiner, Gizmodo.com
Think you got a good deal on those Beats by Dre? Might’ve. Or maybe you paid too much for a knockoff. Thanks to easily accessed suckers like you, business in the world of phony high-end audio has never been better.
Early on the morning of October 28, 2010, a massive strike force assembled outside the Meipai Electronic Audio Factory and three other storage facilities in and around Southern China’s Enping City. What had started out as a tip from a handful of major audio-equipment makers led to a months-long investigation by Guangdong Public Security Department and Jiangmen City police. By day’s end, four people were in jail, and 1,200 counterfeit audio items were in police hands. The so-called “New Dynamics Audio Equipment Factory” was effectively shut down.
It was the first salvo in a new war against fake wares, lead by an unlikely coalition of audio companies who, though fierce competitors in stores, are closely allied against a common enemy.
This February, the same international initiative helped tip authorities off to another den of fakes, this time in the United Kingdom. Together, the two stings have netted counterfeit audio gear worth more than $500,000. Sounds like a lot, but that’s just a teensy drop in a giant bucket: a multibillion-dollar industry that’s proving nearly impossible to quash.
The two recent busts came after months of investigation — including test purchases, surveillance stakeouts, and a series of coordinated raids on warehouses and private residences. All told, authorities have managed to confiscate everything from fake mics and headphones to loudspeakers, amps and mixers.
The British raid in particular represents the largest seizure of bogus audio equipment (mostly headphones) in the country’s history, according to Sennheiser and Monster. And the two counterfeiters now under investigation are reportedly linked to Britain’s third-largest online retailer.
While the size and scope of these separate raids may be noteworthy, counterfeiting and copycat designs are of course nothing new to the headphone and AV industry.
Over the years, a thriving gray market for ersatz goods has sprung up all over the world, nourished by cheap Chinese production costs, increasingly sophisticated manufacturing facilities, e-commerce, and often non-existent IP and trademark laws. In other words, those knock-off Ferrari Limited Edition Monster Beats you mistakenly bought are not only getting easier to make, but they’re also quite lucrative for the guys selling them.
According to a recent study put out by the U.S. Chamber of Commerce, counterfeit goods could account for as much as 10 percent of China’s gross domestic product — third economy, holla! Worldwide, it’s regarded as $600 billion dollar industry, fully half of it in the United States.
“Right now, the counterfeit problem is at an all time high for a few reasons,” explains David Tognotti, vice president of operations and general counsel for Monster Cable. “You have a China economy that needs to keep people employed and create millions of jobs every year; you have lax laws and enforcement in that country, you have rising consumer demand for luxury branded goods, and you also have people with a lot less money in their wallets.”
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