The UK record industry today settled its dispute with an online company which imported cheap CDs into Britain and Ireland.
The row between the British Phonographic Industry (BPI) and CD Wow! began when the BPI accused the company of flouting trade laws. BPI claimed CD Wow! was illegally buying records in the Far East and America for a fraction of the cost of European distributors.
The CDs were then sold to UK consumers at a lower price than CD Wow!'s competitors, which bought the records legitimately from European vendors. This meant that CD Wow!'s profit margin was significantly higher than other music companies.
When challenged by the BPI, CD Wow! said it would fight the case in the courts, but settled just two weeks before the case was due to go ahead.
Today, the web company agreed it would not sell CDs which it had sourced from outside Europe to UK and Irish customers.
All CDs bought in the UK from CD Wow! will now come from European distributors. All other details of the settlement were kept confidential.
BPI routinely carries out test purchases over the Internet to ensure companies are importing legally.
Proceedings have been launched against Play.com, a Jersey-based online retailer of CDs, DVDs and video games, which operates in a similar way to CD Wow!. Amazon.co.uk was found to be complying with trading regulations but the BPI is still looking into its American sibling Amazon.com.