TechDirt relates a terrible tale: UK Judge Rules That Selling Consumers Cheaper CDs Is Illegal
[…] Just to be clear: CD-Wow was selling legitimate discs, not pirated copies. They’d simply found a cheaper supplier in another part of the world, and passed the lower costs onto consumers. The labels argue this is somehow a violation of their copyright, but it seems much more like a handy bit of protectionism. Many music buyers are familiar with “import” CDs that often feature different or additional material from releases in their own country, and record labels don’t really seem to have a problem with American buyers shelling out $30 for a Japanese version of a CD, or $12 for a UK import single. But when imports come at a lower price, then it’s a problem. […]
The High Court in London ruled that the site’s owners, Music Trading Online, were “in substantial breach” of a 2004 agreement to stop selling such albums.
Record companies complained that the site broke a deal not to buy cheap CDs in places like Hong Kong and re-sell them in the UK without permission.
CD-Wow said the judgement “spelled disaster for millions of music fans”.
The company will be fined in July after an inquiry into how much it owes the record labels who complained of copyright infringement.
*sigh* Violating the terms of an out of court settlement. This should be ugly. A little more detail from the Channel Register (?): CD WOW! fined for contempt of court
The recordings were not pirated discs but their sale in the UK broke copyright law. Record labels typically create regional companies to whom they licence the copyright in music for sale in those regions. Those companies can then match their prices to particular market conditions, and through copyright law the parent label can ensure that those markets which can bear a higher price are forced to pay that.
Though CD WOW! maintains that it has never deliberately engaged in parallel importing, it promised a court in 2004 that it would not conduct parallel importing in the future in order to settle its case with the BPI.