While it is quite obvious that the record companies go after those who sell pirated music CDs, the last thing one would expect would be the record companies to go after those who sell the real thing. Well, back in 2004, the British record companies went after CD-Wow for importing cheap official music CDs from Hong Kong and selling them to the UK and managed to make an agreement that CD-Wow would stop importing its CDs.
However, as the company resumed back to importing its CDs again, the High Court in London ruled that the website's owners, Music Trading Online, were in substantial breach of its 2004 agreement. The court ordered the company to pay £37 million along with interest to the British Phonographic Industry. The BPI, which represents the UK's major record labels mentioned that this ruling was a significant legal victory for the music industry and that they also succeeded in obtaining a freezing order against CD-Wow, freezing its assets and banking accounts. BPI lawyer Roz Groome, mentioned that the body would use this ruling to target other retailers that exploit parallel imports.
Despite this ruling, CD-Wow mentioned they will continue selling cheap CDs and may appeal the ruling, mentioning that other bigger websites are doing the same and have not been hit by the music industry. The BPI on the other hand claims that CD-Wow has had a negative effect on legitimate UK retailers and record companies. CD-Wow is the UK's third largest online music retailer after Amazon and Play.com. It claims that any copyright violation would have been the result of human error and that they buys legitimate products from the record companies themselves.
I would expect the music industry to be more than happy that CD-Wow has been selling official music CDs, especially since no piracy was involved and that its customers were actually buying official CDs. If the music industry does manage to either block CD-Wow out of the UK market or force it to source its CDs locally, consumers who were content buying the lower music discs may be put off buying music if the price goes back up, potentially resorting to unofficial sources. It clearly shows that the British music industry does not tolerate competition; since they could easily have dropped its local prices to encourage consumers back into the stores or to buy music locally.
Thanks to GristyMcFisty for letting us know about this news. Full details can be read on this BBC news report.
