CD Wow fined £41m over imports

High Court rules Hong Kong based online retailer breached copyright laws

Dinah Greek, Computeract!ve 29 May 2007

The end of cheap CD and DVD imports moved a step nearer as the British Phonographic Industry (BPI) today announced the UK record industry has been awarded a substantial sum in damages against online retailer CD Wow.

The award of over £41m is the culmination of a long-running feud between the BPI and Hong Kong based CD Wow over cheap imports of CDs and music DVDs into the UK from Asia.

The BPI said these imports were illegal and undermined the legitimate businesses of UK retailers and record companies.

BPI chief executive Geoff Taylor said: "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."

The six-year fight lead to a number of court battles. In 2004 CD Wow dropped its defence in court proceedings at the eleventh hour and agreed to stop parallel importing and paid hundreds of thousands of pounds to the BPI.

According to the BPI, this undertaking was ignored and the retailer continued to import cheap CDs into the UK. In February this year CD Wow admitted in the High Court to 33 breaches of copyright law in contravention of this previous undertaking to the UK courts.

It said that it was a result of "human error" but this didn’t appease the BPI. It took the case back to the High Court and Judge Evans-Lombe made the award of over £41m.

BPI general counsel Roz Groome, who spearheaded the industry's six-year case, added: "CD Wow have consistently broken the law, ignored High Court rulings, and have continued to trade illegally throughout.

"Clearly the courts have lost patience with this rogue retailer and the message is clear; any company seeking to engage in this type of illegal trade will face the toughest sanctions."

The BPI said has already begun taking steps to enforce the damages award, having obtained a freezing order on the retailer's Hong Kong bank accounts and assets. It is recognised that enforcement of the award will be time-consuming and complex given that the company's assets are located in a number of jurisdictions.

"The BPI will use this landmark ruling to take firm action against any other retailers that import illegally."

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