Online music store CD-WOW fined over illegal imports

Cut-price online music store CD-WOW was ordered by a judge on Tuesday to pay damages possibly stretching into millions of pounds for breaching copyright by illegally importing albums into Britain.

The High Court action had been brought by seven major music manufacturers and record industry trade association BPI, which has been waging a six-year campaign against the site.

The amount of damages will be determined by a separate inquiry but music industry insiders estimated they could work out at up to 4 pounds per CD or DVD involved.

That, they said, would mean the penalty could run into millions and could force CD-WOW to raise its prices.

CD-WOW, the second-largest online music retailer in Britain, said it was the victim of a policy of protectionism by the record industry.

Justice Evans-Lombe ruled at London’s High Court that CD-WOW had “no tenable ground of defense” to test copyright case claims by the music industry, including companies such as EMI Records and Sony Music Entertainment.

They had accused CD-WOW of breaching their copyright by importing CDs from countries outside the European Economic Area (EEA), a grouping of countries that began operating as a unit in 2004.

This, they said, was contrary to an agreement reached in January of that year in which CD-WOW undertook to import into Britain only from EEA countries.

The judge deferred consideration of any further penalty to be imposed on CD-WOW until after the damages inquiry, expected to be completed by July.

CD-WOW insists the breaches were a result of human error in their large Hong Kong warehouse, where it says EEA products are stored separately from non-EEA products.

Speaking afterwards, the company’s founder, Henrik Wesslen pledged to go on providing the cheapest possible CDs and DVDs.

“We knew the verdict was always going to be a negative one because we held our hands up to a number of incidents, even though it was not intentional,” he told reporters.

“However, this is a harsher verdict than we would have hoped for and we will be taking this further to fight this injustice.

“At a time when the record industry is losing vast revenue to piracy, it seems ludicrous that they can set out to destroy a section of the market that is actually making them money.”