The BPI has announced that they last week won a substantial sum in damages, in the tens of millions of pounds, from their legal fight against music etailer CD-Wow.
As much previously reported, the trade body took legal action against the Hong Kong based web company earlier this year over allegations that they were violating UK copyright laws by sourcing CDs from suppliers outside the EU, which enables the company to undercut their rivals without affecting their profit margins because the wholesale price of CDs is cheaper in certain other parts of the world.
The BPI had previously taken legal action against CD-Wow regarding that practice in 2004, after which the etailer promised to adhere to UK copyright restrictions re the sourcing of wholesale CDs. But the BPI said it had evidence CD-Wow had continued to sell music sourced outside the EU. CD-Wow bosses argued that any cases of CDs sourced from outside the EU being sold to UK customers were isolated and down to human error, but the courts disagreed, ruling that there was "strong evidence that CD-Wow was committing widespread breach of the undertakings" and that the company "had taken no effective steps to ensure compliance with the undertakings even after an application for contempt had been served".
The court resumed last week to consider the damages due following that ruling back in March and although the exact figure due to the UK record industry has not been released, the BPI say it runs in to the "tens of millions".
Welcoming the damages ruling, BPI boss Geoff Taylor told reporters this weekend: "CD-Wow has been undermining the legitimate businesses of UK retailers and record companies by continuing to import CDs and music DVDs illegally from Asia, despite having signed given court undertakings that it would stop doing so. Illegal imports of this kind undermine the huge investments made by businesses here made in homegrown musical talent. This ruling illustrates the lengths that the rogue retailer went to flout the law and maximise its profits at the expense of British musicians and the record companies that supporting them. CD-Wow is no consumer champion; it is a rogue trader that now has to face the consequences of its actions. We have an extremely competitive record industry and retail sector here in the UK, and at an average price of around £8.50, CDs are better value than ever. The vibrancy of British music depends on a fair return on the investments that allow British talent to shine. This decision is an important step in ensuring that British music has a bright future."
No word from CD-Wow on the damages ruling and what impact it will have on their trading in the UK or elsewhere, though the BPI has said it has obtained a freezing order on the firm's Hong Kong bank accounts and assets in order to enforce the damages award, adding that they believe the etailer has been trying to hide assets.