[Article] CDWow and BPI settle landmark case

DMC

Music/Radio, Business, this could go to a lot of places around boards, so here it is....

From:
Media Guardian

CDWow and BPI settle landmark case

Owen Gibson
Wednesday January 21, 2004

The UK record industry has settled its row with online retailer CDWow over selling cheap CDs on the web, just two weeks before the landmark case was due
to go to court.

Trade body the British Phonographic Industry and CDWow today announced they had reached a settlement over claims that the online retailer was breaking the law by selling CDs from the Far East.

CDWow was able to offer chart CDs for £8.99 and under because it bought them at lower wholesale prices in the Far East and sold them directly to consumers.

The site has proved a huge success, with annual turnover in excess of £100m, but the BPI argued that CDWow was breaking the law by importing CDs from outside the European Economic Area and selling them at cheaper prices than UK retailers without the consent of copyright owners.

The CDWow chief executive, Phillip Robinson, had in turn argued that the company agreed deals with the record labels concerned overseas and didn't actually import the CDs, merely posting them individually to the UK from the Far East.

Under the settlement announced today, CDWow has backed down and agreed not to sell CDs that have first been placed on the market outside Europe to UK and Irish customers.

The settlement is likely to hit CDWow's sales because it will now add a £2 surcharge to buyers from the UK and Ireland, explaining that the extra cost is as a result of the BPI's action.

"I am delighted that we have been able to resolve this case on agreed terms without the need for a trial," said the BPI chairman, Peter Jamieson. The BPI is also looking at taking similar action against Play.com and US web retail giant Amazon.com.

"This has been a long drawn-out affair which we are pleased to have resolved," added Mr Robinson, who had earlier vowed to fight the case.

However, while the major record labels have won their battle against CDWow, industry insiders believe that they will come under increasing pressure to reduce the retail price of CDs in the UK in any case.

As legal download services offering albums from £6.40 become more popular, high street retailers are likely to put more pressure on the labels to cut prices.

Already, Universal has agreed to slash the price of CDs by 25% in the US, and the UK Consumers Association is believed to be investigating the possibility of taking the UK's major labels to court over the price difference between CDs in Europe and the rest of the world.

The BPI has also launched proceedings against Play.com, a Jersey-based online retailer of CDs, DVDs and video games, which operates on a similar basis.

And Amazon.com could be drawn into the row because it sells CDs to UK customers that are not available in this country, undercutting traditional high street retailers. The BPI could argue that they are acting without the consent of UK record companies.

Robbo

The one about Amazon being persued for the same reaons is at : http://media.guardian.co.uk/newmedia/story/0,7496,1117734,00.html

I strongly disagree with this form of protectionist behaviour.

anthonymcg

Shop around for the best value? How the hell are we supposed to do that exactly if places which do sell cheap goods are shut down?

ThreadKiller

Poster Earlier

ixoy

May I sum up BPI in a single word, reflecting everyone here's opinion of them: cnuts.
That is all.

DMC

Originally posted by ThreadKiller
Poster Earlier

Pld with the breaking news squire!