Apple's Anti-Counterfeiting Efforts in Asia Hampered by Uncooperative Authorities

CNN reports on details of Apple's anti-counterfeiting efforts centered in China, noting that the company has had difficulty winning the cooperation of Chinese authorities to investigate and shut down those responsible for the fake Apple products. The details were revealed in documents from U.S. diplomatic cables published by WikiLeaks last week.

The technology giant eventually organized a team in March 2008 to curtail the explosion of knockoff iPods and iPhones, according to an electronic memo from the Beijing embassy dated September 2008.

Yet, three years after Apple moved to crack down on widespread counterfeiting and put pressure on China, progress has been slow. Gadget piracy isn't a high priority for the Chinese government, the U.S. reports and experts say.

The reports note that Apple's efforts have been led by vice president for global security John Theriault, a former FBI special agent and Pfizer vice president who was hired by Apple after he led a campaign against production of counterfeit prescription drugs. Theriault was joined at Apple by his Pfizer associate Don Shruhan, who now serves as a director with Apple's security team in Hong Kong.

fake apple store reuters
Counterfeit Apple store in Kunming, China

Despite putting the anti-counterfeiting task force together, Apple has had only limited success as Chinese authorities have been reluctant to respond to Apple's requests for assistance. Apple has tried to convince authorities to take a more active role by citing the potential dangers of exploding batteries in counterfeit products and the loss of tax revenue associated with the knockoff products, but Chinese authorities have cited their own reasons for not pursuing the claims.

The arguments weren't very effective. China's government declined to investigate a facility in March 2009 that was manufacturing imitation Apple laptops because it threatened local jobs, says a cable dated April 2009. A different arm of China's government scrapped plans for a raid on an electronics mall in the Guangdong province because it could have driven away shoppers, the cable says.

Last month, several counterfeit Apple retail stores in China gained significant publicity after being highlighted by a popular blog. Two of those stores were closed over permit issues, but dozens more stores have since been discovered. Apple has also sought to crack down on knockoff products in the United States, having recently filed suit against a pair of businesses in New York City selling such goods.

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Top Rated Comments

j2-core Avatar
166 months ago
Let them have their fake Apple Stores

Apple has recently "requested" that their Foxconn factory replace all of the line workers with robots. I assume that they are doing this to stop the suicides, but that is one million people that Apple is putting out of a job. I would imagine that the Chinese government is not too happy about that.

I wish Apple wasn't so cheap. They should pay their taxes and move the company back to the US then build their robot automated factory in the states. But you can't tick off the stock holders. Sad.
Score: 11 Votes (Like | Disagree)
silentnite Avatar
166 months ago
It's going to be very hard for Americans to stop anything in China. First off they don't respect the U.S. They also see how much money can be made with these products like anything else that's in demand. Apple, as well as Gap and Nike just to name a few have had this problem in China. This is a price you pay when you short change Americans by shipping our jobs over seas. In the long run are you really saving.
Score: 9 Votes (Like | Disagree)
nemaslov Avatar
166 months ago
Well then let's just build a bunch of factories in the US and build everything here.
Score: 8 Votes (Like | Disagree)
ChrisA Avatar
166 months ago
This is the price one pays for building you stuff in China. If the Chinese company you hired can build an iPod then so can 50 others. The technic a design data is easy to copy and gets sold and resold.
Score: 7 Votes (Like | Disagree)
Bookmonke Avatar
166 months ago
Here is a thought, why not bring the jobs to some of the right to work states here, that way you can keep the unions out and create some jobs here.
Score: 7 Votes (Like | Disagree)
eawmp1 Avatar
166 months ago
While one can argue about the merits of the intellectual property patent suits, I think going after conterfeit merchandise which can cut into your bottom line and tarnish the brand name with substandard quality is reasonable.

Unfortunately not the first time the Chinese have turned a blind eye to counterfeiting or bootlegging.
Score: 6 Votes (Like | Disagree)