UK recorded music industry awarded substantial damages against CD Wow
London, 29th May 2007
The BPI has announced that the UK record industry has been awarded a substantial sum in damages against internet retailer CD Wow.
The Hong Kong based business had been illegally importing CDs and music DVDs into the UK from outside the EEA.
This is the largest damages award ever made in favour of the BPI and sets an important legal precedent as the industry seeks to prevent the illegal importing of CDs from outside Europe.
BPI Chief Executive Geoff Taylor said:
"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 given court undertakings that it would stop doing so.
"Illegal imports of this kind undermine the huge investments made by businesses here 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 record companies 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."
The scale of the damages awarded, over £41 million, represents a significant legal victory for the UK recorded music industry, and will serve as a major deterrent to any would-be illegal importers.
The BPI 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.
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 will use this landmark ruling to take firm action against any other retailers that import illegally."
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Based on figures supplied by the TNS Audio Visual Trak Survey: In 2006, the average price of a single disc CD, artist/ compilation release was £8.41. The average price of all CDs (including multiple CD albums) was £8.94.
About the damages ruling
The sum awarded to the record industry represents damages and interest for the infringements of copyright that the retailer has caused since January 2004.
This award follows the court's finding in March 2007 that CD Wow was in substantial breach of the undertakings it gave to the court in January 2004 that it would not illegally import CDs into the UK and Ireland.
Following a 4-day trial in March 2007, Judge Evans-Lombe ordered a damages inquiry which was due to take place in July. CD Wow's failure to co-operate with the court's orders for disclosure and payment of security resulted in the judge's assessment of damages last week, without delaying the matter until July.