[OLPC Security] Grey Markets: differentiation of legitimately purchased laptops

Mike C. Fletcher mcfletch at vrplumber.com
Mon Oct 15 19:06:47 EDT 2007

Ka-Ping Yee wrote:
> On Mon, 15 Oct 2007, C. Scott Ananian wrote:
>> I believe the current plan is to only sell G1G1 machines to countries
>> we are *not* targetting for actual deployment.  If you see an XO in
>> the USA, you're a friend of the project.  If you see an XO in an
>> adult's hands in Nigeria, you're a thief.
That doesn't particularly address the issue here.  We are talking about 
situations where laptops cross borders after deployment.

> But that's not the point.  The concern expressed at the security summit
> was that someone would steal a shipment of laptops intended for Nigeria
> in order to resell them at a profit in the United States.  It might
> even be profitable to buy or barter for laptops that have already been
> distributed, and ship them to the United States for resale.
Yes, it is the Grey Market effects where:

    * children are coerced into giving away their laptops
    * individuals fraudulently acquire laptops for resale
    * laptops are diverted en-masse
          o e.g. the school, the "town elders", or some similar group
            decides to sell the children's laptops allocated by the
            government in order to fund some other project (e.g. the
            elder's retirement fund)

as long as there is a market *somewhere* where laptops are being sold, 
there will be an incentive to divert laptops.  Borders are porous, the 
laptops are, compared to average wages in many of our target countries, 
sufficiently expensive to make a month or so of work a reasonable 
investment if one can sell two or three laptops on the grey market as a 

Also consider cases where a well-meaning friend-of-the-project travels 
to Africa with their legitimately purchased machine.  With a visibly 
differentiated machine, no problem, you point out that yours is a 
"black" or "white" or "gold" (or whatever) laptop, indicating that it's 
a non-educational machine, and you continue on sans lynching.

If we can easily curtail grey-market operations, I would strongly 
suggest that we make the attempt.

With respect,

  Mike C. Fletcher
  Designer, VR Plumber, Coder

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