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Concept
Grey market
Summary
A grey market or dark market (sometimes confused with the similar term "parallel market") is the trade of a commodity through distribution channels that are not authorized by the original manufacturer or trade mark proprietor. Grey market products (grey goods) are products traded outside the authorized manufacturer's channel.
Manufacturers of computers, telecom, and technology equipment often sell these products through distributors. Most distribution agreements require the distributor to resell the products strictly to end users. However, some distributors choose to resell products to other resellers. In the late 1980s, manufacturers labelled the resold products as the "grey market".
The legality of selling "grey market" products depends on a number of factors. Courts in the United States and in the EU make a number of assessments, including an examination of the physical and non-physical differences between the "grey market" and authorized products to determine whether there are material differences. The legality of the products oftentimes turns on this examination.
In November 2016, the Court of Appeal of England and Wales confirmed a ruling in the case of R v C and Others that the sale of grey goods can be met by criminal sanctions under section 92 of the UK Trade Marks Act 1994, with a potential penalty of up to 10 years in prison.
It is worth mentioning that the goods sold in this case were, in fact, counterfeit and infringed on trademarks; as such, people would consider these to be black market goods, rather than grey. The simple fact is that selling or reselling any products one has bought is not generally considered a crime, and most traders rely on their right to resale and thus trade.
Grey market goods are goods sold outside the authorized distribution channels by entities which may have no relationship with the producer of the goods. This form of parallel import frequently occurs when the price of an item is significantly higher in one country than another. This commonly takes place with electronic equipment such as cameras.
Official source
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