Friday 23 February, 2024 (modified Monday 23 February, 2026)

Mobile devices: counterfeit

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Background

A counterfeit mobile device explicitly infringes the trademark or design of an original or authentic branded product, even where there are slight variations to the established brand name.

Due to their illicit nature, these mobile devices are typically shipped and sold in shadow or underground markets by

organised criminal networks. It is estimated that almost one in five mobile devices may be counterfeit.23 This has far-reaching negative impacts. Consumers risk lower quality, safety, security, environmental health and privacy assurances. Governments forgo taxes and duties and must contend with increased crime. Industry players are also affected, as it can harm the trademarks and brands of legitimate device manufacturers and the substandard performance of counterfeit devices can have implications for mobile operators.

Some countries have introduced national lists of homologated (approved) devices to combat counterfeiting, smuggling and tax evasion. The purpose of homologated lists is to indicate which devices are permitted access to mobile networks. Mobile operators add device-blocking capabilities to their local networks and connect with the national homologated list to ensure only permitted devices are allowed network access.

However, counterfeit mobile devices are not easy to identify and block, given that many have International Mobile Equipment Identity (IMEI) numbers that appear legitimate. It is common for counterfeiters to hijack IMEI number ranges allocated to legitimate device manufacturers for use in their products, which makes it more difficult to differentiate between authentic and counterfeit products.

Debate

How can governments and other stakeholders best address the issue of counterfeit mobile devices?

Industry position

The mobile industry supports the need for legal and product integrity in the mobile device market and is increasingly concerned about the negative impact of counterfeit devices on consumer welfare and societyin general.

Although mobile operators and legitimate vendors cannot stop the productionand distribution of counterfeit devices, multistakeholder collaboration can help combat the issue at the source. National law enforcement and customs agencies should take measures to stop the production and exportation of counterfeit devices in their jurisdictions. Information on crime patterns and specific criminal activity relating to counterfeit devices must be provided by national agencies to appropriate international bodies, such as Interpol and the World Customs Organization (WCO), to encourage and facilitate action by relevant agencies in other jurisdictions.

The GSMA makes its device information and device status services available for customs agencies and other industry stakeholders to verify the authenticity of mobile device identities online. National customs agencies are advised to use these services as part of a rigorous set of measures to monitor the importation of mobile devices.

The GSMA encourages mobile operators to adopt systems like the Equipment Identity Register (EIR) and to connect to GSMA systems such as the GSMA Device Database.

Using the GSMA global Type Allocation Code (TAC) list of all legitimate device identity number ranges, operators can block devices with invalid IMEIs.

National authorities should study which factors, such as import duties and taxation levels, contribute to local demand for counterfeit devices. The potential to reduce tax levels on devices to narrow the price gap between counterfeit/smuggled and legitimate devices should be carefully considered, as it could make the underground market a less lucrative place to trade.

Implementing national lists of homologated devices can be successful if they are linked to the GSMA TAC list. National import verification systems and national device homologation systems should also be linked to national lists of approved devices. Some implementations propose that customers register their details and devices centrally. The GSMA does not support central customer registrations because they are unnecessary – the subscriber identities associated with each device can be established by mobile operators themselves.

Where national authorities are considering introducing a system to block non- homologated devices, they should consider offering amnesty to consumers who already own non-compliant devices. Blocking huge quantities of devices would not only be a major loss for consumers, but would also have significant social, economic and security impacts. It is recommended that the funding model for such systems should not place a burden on consumers and mobile operators, since they are not the cause of the underlying issue. National systems should also not be applied to roamers who might be denied service without cause.