Resellers and consumers have been warned to watch out for "grey" Princo DVD media disks, which may be faulty.
According to master reseller, Pioneer Computers Australia, the disks are unofficial imports and possibly also counterfeit.
Police and customs were investigating, Pioneer said.
Princo claims to have more than 50 per cent of the DVD media disk market, and believes such dominance has attracted grey marketeers. Pioneer, which imports millions of official disks from Taiwan each year, said staff members discovered the grey disks at computer markets selling for less than a dollar, which compares to the official retail price of $1.15.
Pioneer sales manager James Cook said such a discount, helped by the disks costing the reseller $0.20 each, was eating into the firm's own margins.
The distributor tried to trace where they came form, but found that traders didn't want to divulge their sources.
Princo also told them it only sold to Pioneer and two other distributors in Australia.
The Taiwanese firm has given Pioneer the task of educating resellers about why they should by through the authorised channel.
Princo said officially distributed disks were 100 per cent Grade A, whereas grey importers offered no such guarantee.
Some disks may also be counterfeit, with Princo B Grade and C Grade disks re-badged as A Grade.
"Resellers are warned to stay away from grey imports given their high instances of failure which tarnish Princo's reputation." a Princo statement said.
The official disks are described as having a white A Grade label on them, whereas the grey disks will carry a coloured sticker.
Princo advises anybody who might have inadvertently bought counterfeit or unauthorised disks to return them to their supplier for a refund. The DreamVision media disks are commonly used by the government and education sectors.
Mass retailers include Harvey Norman.