More on the CD-Wow story for ya. They've sent an email, right, and it says 'no, not us, we're not the bad boys here, you must be thinking of someone else'. Or something like that.
As previously reported, e-tailer CD-Wow is accused of sourcing CDs from distributors outside of the EU, who supply major label releases at lower wholesale prices, and then selling them to UK customers via their online retail operation. Such a practice enables them to undercut their competitors. While those distributors are legitimate agents of the major record companies, UK copyright law says retailers cannot use non-EU based suppliers, unless they have the specific permission of a content owner. That law was restated when the BPI originally successfully sued CD-Wow over its purchasing practices in 2004. After that court case CD-Wow committed to changing its purchasing practices, but the BPI now say they have evidence of the online retailer continuing to source CDs from non-EU suppliers - saying they have bought CDs via the retailer's UK operation that were sourced from Hong Kong.
Although, as previously reported, CD-Wow shareholder Philip Robinson earlier this week admitted that his company was in breach of its undertakings, and confirmed he would pay the BPI £50,000 to cover their legal fees regarding the matter, the company itself is disputing the BPI's claims that it should pay a fine, compensation and legal fees for any violation of the 2004 agreement. In a widely reported email, the retailer says that while it accepts some CDs sourced from outside the EU have been sold to UK customers, that has only happened in a tiny number of isolated incidents, and that therefore the company cannot be held to be in breach of the 2004 court order on any substantial level.
The email says that all its CDs are despatched from Hong Kong, but that doesn't mean the CDs being despatched have not been properly licenced for UK customers. It said: "The issue is whether a CD sold to a customer in the UK is licensed for sale in the UK and Europe. The CD does not have to be produced in the UK - in fact almost no CDs are actually produced over here now". It admits to about 33 CDs from non-EU sources being sold to UK customers, but says that each of those cases were "unintentional and the result of human error", adding that in the context of the 100,000 CDs despatched daily, such a small number of errors cannot constitute a significant breach of the 2004 agreement.
Of course, the BPI had already said it expected CD-Wow to respond in that way, so the retailer's email is unlikely to stop the trade body pursuing with its court action. Meanwhile the trade body and the retailer have been preceding their court battle with a PR battle. CD-Wow claim that the BPI is targeting them because the greedy record labels they represent don't like the fact the etailer is forcing down the price of CDs in the UK - implication: "the record labels rip music fans off, we're forcing the market so music fans aren't so ripped off anymore, the labels are trying to stop us". The BPI argue that CD-Wow's logic is flawed - ie CDs are cheaper in Asia because everything is cheaper over there, you can't criticise UK companies for charging prices in line with the wider UK economy.
A BPI statement says: "The British record business accrues British costs employing British workers to develop British artists. Record labels therefore set British prices that allow them to cover those costs to stay in business".