Inside Move: U.K.’s Slipped discs

Probe targets imported tune sales

The British music industry is investigating the alleged illegal importing of CDs by Amazon.com and other online outfits that bring in CDs from outside the European Economic Area.

Trade group the British Phonographic Industry is seeking to determine whether “parallel importing” by Amazon.com breaches copyright law.

The probe comes in the runup to the industry’s high-profile illegal importation case against Hong Kong retailer CD Wow, which is due to be tried next month.

CD Wow sells albums for a flat-rate £8.99 ($16) with free delivery, undercutting traditional retailers by some $7. Despite almost zero advertising, CD Wow has proved a major success story, posting sales of $180 million in 2003.

The BPI alleges CD Wow breaks copyright rules because it imports product without the copyright owner’s consent.

In an interview in the Financial Times, CD Wow topper Philip Robinson refutes such allegations: “I would not have set the business up if there was something intrinsically wrong with it.”

A London-based lawyer who spoke with Variety suspects the High Court will side with the BPI: “The BPI will probably win by utilizing the floodgates argument. There is a vested interest in halting online entrepreneurs replicating the CD Wow model, and I expect the crack in the dam to be stopped.”

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