CD WOW! settles parallel imports case, raises prices

Out-Law News | 22 Jan 2004 | 12:00 am | 2 min. read

Cut-price CD and DVD internet retailer CD WOW! has settled an action brought against it by the British Phonographic Industry and others, alleging that its imports of music from Hong Kong breach UK copyright laws. Prices will rise by £2.00 per CD.

The BPI's complaint concerned the sale of CDs from the cd-wow.com web site – CDs that had been bought cheaply in Hong Kong, allowing the company to undercut rivals in the UK and Ireland.

The BPI argued that while the discs were genuine, and had been released in Hong Kong with the appropriate licences for sale in Hong Kong from the copyright owners, the CDs had not been licensed for sale in the UK.

The complaint of the BPI was that its members and its fellow claimants are the owners or the exclusive licensees of the UK copyright in titles being sold at the site; that the discs are being imported without their consent; and that this amounts to parallel importing. Such parallel imports are prohibited under UK copyright law.

In a joint statement released yesterday, the BPI and CD WOW! announced that the action had settled – two weeks before the case was due in court.

CD WOW! has agreed that it will not sell CDs that have been first placed on the market outside Europe to UK and Irish customers. It will only sell CDs that have first been placed on the European market to UK and Irish customers. All other details of the settlement remain confidential. The downside for consumers is that they can no longer enjoy CD WOW!'s low prices – it offers most new releases at just £8.99 including shipping.

BPI chairman Peter Jamieson said

"I am delighted that we have been able to resolve this case on agreed terms without the need for a trial."

CD WOW! director Philip Robinson said

"This has been a long drawn out affair which we are pleased to have resolved."

CD WOW! sent an e-mail to customers yesterday:

"The UK Major record companies through their mouth piece the BPI have unfortunately restricted the UK and Irish consumers' right to enjoy the freedom of the World Wide Web.

"As from this weekend, any CD ordered for delivery to the UK and Ireland will incur a surcharge as we are only able to deliver CDs manufactured within the EU (more expensive).

"Delivery to the rest of the world will not be affected."

The company confirmed that the price of DVDs and games will not be affected but

"as of Sunday 25th January 2004 a surcharge of £2.00 (3.00 Euros) per CD will apply."

The settlement of the case does not rid BPI of the issue of parallel imports. An ongoing action against CD and DVD seller Play.com has still to be resolved and there were reports early this month that the trade group has begun an investigation into Amazon.com over its sale of cheap CDs.