More on the CD-Wow story now. The BPI yesterday said that it had reached a deal with one of the shareholders of the online retailer, but that its litigation against the company itself continued.
As previously reported, the UK record industry is taking CD-Wow owners Music Trading Online to court over allegations they have broken a commitment made in the High Court in 2004 regarding where they source the CDs they sell via their website. Prior to 2004 CD-Wow bought CDs from distributors based outside the European Union, who offered lower unit prices and therefore enabled CD-Wow to undercut their competitors. However, UK copyright law forbids using suppliers outside the EU without a copyright owner's express permission. When, in 2004, the BPI sued MTO over their supply tactics, the company pledged to stop using non-EU suppliers. The latest lawsuit has been launched because the BPI claim that, while monitoring the CD-Wow service, they have been sent CDs sourced from Hong Kong - in breach of the 2004 commitment.
On Monday one of CD-Wow's key shareholders, Philip Robinson, admitted that the company was in breach of its undertakings, and he said he accepted some responsibility for that breach. To that effect he agreed to pay the record industry trade body £50,000 to cover their legal costs in pursuing the latest litigation.
CD-Wow itself has also admitted breaching its 2004 undertaking, but denies the BPI's claims that it should pay a fine, damages and costs in relation to the breach. To that end the BPI has said it will continue with its legal action, that it intends to "produce evidence which shows that CD-Wow has systematically broken undertakings embodied in a court order", and that it will ask the court to force the firm to pay a fine, to compensate the content owners, and to cover the BPI's legal costs.
Confirming their plans, BPI General Counsel Roz Groome told CMU: "We believe CD-Wow is guilty of flagrant and systematic breaches of a High Court order. The penalties for such breaches can be significant. Contrary to some reports this case is nothing to do with price. Plenty of retailers manage to sell CDs at competitive prices without breaking the law".