The probe concerns what are known as parallel imports – branded goods that are imported into the EU from countries that sell those goods at a lower price. The importers are therefore able to sell the goods more cheaply than the trade mark holder intends.
The suspicion is that Amazon.com may have been sourcing its products from cheap foreign wholesalers when, according to UK law, the CDs should have been sourced from within the European Economic Area. It is not investigating Amazon.co.uk, which only sells UK-sourced CDs.
The BPI admitted to Reuters that an investigation is ongoing, but spokesman Matt Phillips explained: "This is a standard routine. We look at many web sites to determine if the product is legitimate".
He added a warning, however: "If we find a net retailer is importing music from outside Europe, then they are infringing copyright law."
The BPI has been investigating other on-line retailers for similar breaches of competition and trade mark law. The popular CD and DVD sellers Play.com and CD-Wow have both been sued by the trade group, with the case against CD-Wow due to begin its court hearing next month.
The conflict between competition and trade mark rights is another common feature of parallel import cases. In a different case this week, the European Court of Justice struck a blow for trade mark holders when it dismissed an appeal by the Commission over imports of a heart drug.
Pharmaceutical giant the Bayer Group had restricted supplies of its drugs to Spanish and French wholesalers who had taken advantage of a 40% difference in the price of the drug in Spain and France compared to the UK. The wholesalers had exported a large quantity of the drug to the UK, causing the UK Bayer subsidiary a loss of DM 230 million.
In 1996 the Commission took the side of the wholesalers and fined the Bayer Group for restricting its supplies. But its decision was overturned by the European Court of First Instance in October 2000, on the grounds that there was no provable agreement between Bayer and the wholesalers to limit parallel exports of the drug to the UK.
On Tuesday, the European Court of Justice approved this ruling.
It should be noted, however, that the Bayer decision, which was made on the basis of competition rules, related to imports within the EU.
This reflects a Commission report from June of last year that stated: "in law, trade mark rights cannot be invoked to restrain the free movement of goods within the EU, but they can be used to restrain the entry of such goods into the EU."