Chinese Police Shut Down Apple iPhone Counterfeiting Operation
Chinese officials posted publicly about a raid that took place in May in which authorities uncovered an operation that had sold more than 41,000 fake iPhones. The company was pretending to be an electronics repair shop but was packaging used cell phone components to look like iPhones, according to Reuters.
At present, it is unknown where the devices were exported to or how many counterfeits actually made it into the hands of consumers so far, but Chinese officials have been on a crusade to break the stereotype of the Chinese counterfeit economy for some time. Previously, a scandal erupted when it was discovered that there were several stores in China which were made up to look like Apple stores but were unauthorized retailers, selling counterfeit Apple products.
Counterfeiting is one of the unknown costs of manufacturing in China for US companies. It can be very lucrative for an employee to steal the design of a product and sell it to a local manufacturer, who will counterfeit the item.
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The Chinese government has vowed to reduce the problem as it reflects negatively on their priorities. Companies like Apple do a lot of business with China and the government views it in their better interest to cut down on piracy and theft of intellectual property.
The government was tipped off by US authorities who had seized some of the counterfeit devices coming into the US. Western markets would be the most likely destination if the makers were looking to get the best price for the devices. Several arrests were made, including the couple who the Chinese believe were in charge of everything. The government says the operation made roughly $19 million over time.
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