UK Judge Rules That Selling Consumers Cheaper CDs Is Illegal

from the makes-sense dept

The story of CD-Wow, the second-biggest British online music retailer, has been dragging on for a while. In an effort to offer its customers cheaper CDs, it began importing them from Asia, where they're cheaper, then selling them to consumers in the UK. As this pretty effectively got around record labels' efforts to artificially inflate CD prices there, the BPI got upset and forced the company to stop selling the discs without its consent, resulting in a 2-pound price increase. The BPI then got even more upset when CD-Wow went around explaining how the BPI's actions forced them to increase prices. Now, CD-Wow has been hit by a judge with fines as high as 4 pounds per CD for selling the imports, after legal action from the BPI and several labels. 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. CD sales are falling, a sign that consumers don't see enough value in them at current prices. So rather than lowering prices (or improving the product) to correct that imbalance, the labels would rather keep prices inflated and hold back sales. With decisions like that, it's little wonder these companies are struggling.
Hide this

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team


Reader Comments

Subscribe: RSS

View by: Time | Thread


  • identicon
    Sanguine Dream, 21 Mar 2007 @ 2:24pm

    Wow...

    I know it was bad in America but I didn't think it that bad in the UK.

    I often wonder if this is what people have to look forward to when cleaner (and eventually cheaper) sources of fuel become common place. Will we see the likes of Exxon taking the producers of the new fuels to court for driving the prices of traditional gasoline down (due to the demand for gasoline going down)?

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 21 Mar 2007 @ 6:14pm

      Re: Wow...

      People are already using alternative fuels and being hit with bullshit licensing and tax fuel tax evasion laws. So yes, that is exactly what will happen in this greedy, corrupt scum scucking planet we live on.

      reply to this | link to this | view in chronology ]

  • identicon
    Tim Stevens, 21 Mar 2007 @ 2:39pm

    MPAA, RIAA etc want you to shell out money to buy their crappy product when and where they want you to.

    Moreover, they feel you don't own the thing you purchased. You have only rented a license which they can then void whenever and wherever they so choose.

    Now, you are not allowed (according to this mono-browed, mouth-breathing, knuckle-dragging idiot of a judge) to resell a CD.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 21 Mar 2007 @ 3:14pm

    CDs are now useless

    CDs have become useless to me, and I have never (and will never) pay for one. The money does not go to the artist, it goes to the RIAA. I would rather pay for a concert. Goodluck RIAA, you will lose eventually.

    I will continue to pirate music and sell my friends illegal CDs, not because it is profitable, but because I want the RIAA to lose money. If I could pay 1$ a song for my illegal downloads, and if I could be sure that nearly all of it went to the artist, I would.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 21 Mar 2007 @ 3:51pm

    This is just so wrong. A company finds a way to obtain legal cd's at a lower price and ACTUALLY pass the savings on to the consumer is ruled as doing something illegal...

    reply to this | link to this | view in chronology ]

  • identicon
    andy, 21 Mar 2007 @ 4:31pm

    weak policy

    in international finance, people get away with this everyday... it's called arbitrage. prices usually correct themselves before any serious money is made through outright arbitrage, which is what i suggest the record industry do (that is, adjust prices accordingly). heart, andy.

    reply to this | link to this | view in chronology ]

  • identicon
    John, 21 Mar 2007 @ 4:34pm

    What next a court order mandating that we all buy some crappy Britteny Spears CD?

    reply to this | link to this | view in chronology ]

  • identicon
    Another annonymous coward, 21 Mar 2007 @ 6:45pm

    greedy, corrupt scum scucking POLITICIANS

    One reason for high drug prices and corporations running amok?
    ---------------------
    Excerpt from Wikipedia:
    Fascism is an authoritarian political ideology . . .
    Various scholars attribute different charactersistics to fascism, but the following elements are usually seen as its integral parts: nationalism, AUTHORITARIANISM, MILITARISM, and CORPORATISM.
    ---------------------------------------------------

    That's what we have allowed to happen, here in the USA. It's about time we start calling it by its real name.

    reply to this | link to this | view in chronology ]

  • identicon
    martin, 22 Mar 2007 @ 3:18am

    it's as if they want to cause more piracy. i know i'll be pirating my next cd instead of paying an outrageously inflated price for it. and i used to spend plenty of money on cd-wow.

    reply to this | link to this | view in chronology ]

  • identicon
    Enrico Suarve, 22 Mar 2007 @ 3:19am

    Copyright

    Please could someone, anyone, explain to me how buying a legal CD from a different source is a breach of copyright?

    I honestly don't get it and would love it if anyone out there who has a clue how this could be the case would explain it to me

    This case makes me ashamed to be British - the ruling is closer to the RIAA managed madness in the states, obviously our courts have just as little backbone when it comes to standing up to corporations at times

    Is there anywhere in the world I can emigrate to that isn't sucking it up to the likes of Sony?

    reply to this | link to this | view in chronology ]

  • identicon
    Damn UK, 22 Mar 2007 @ 3:27am

    No copying = no copyright breach

    No copy was made, so no copyright infringement occurred.

    This is not really a copyright issue. The lobbyists got a restriction to prevent parallel importing slipped into copyright law.

    There is an oddity in UK law, section 18 of the CDPA, states that an article is an infringing copy if it has been imported into the UK and its making in the UK would have constituted either an infringement of the copyright in a work or a breach of an exclusive licence agreement related to that work.

    This is bad for the UK because it lets companies charge more to the UK than elsewhere and block imports of cheaper goods in direct violation of free trade rules.
    UK pays more than other countries, so is less competitive as a result.

    See Vista pricing as an example of this.

    So the rule is bad for the UK, yet has been slipped into a copyright measure.

    reply to this | link to this | view in chronology ]

    • identicon
      Glenn, 22 Mar 2007 @ 5:07am

      Re: No copying = no copyright breach

      As is usually the case, laws are made by lawyers to the benefit of lawyers and those who employ lawyers. So, lawyers should never be allowed to sit in any type of assembly that makes laws--it's a conflict of interest to do so.

      reply to this | link to this | view in chronology ]

  • identicon
    Evostick, 22 Mar 2007 @ 4:02am

    This discredits all BPI arguments about CD prices being a bargain in the UK.

    If you can transport the same product halfway around the world, and still sell it cheaper than the locally produced version, then the local version is obviously to expensive.

    The energy and time used to transport the CDs are also a huge waste of resources!

    reply to this | link to this | view in chronology ]

  • identicon
    Sanguine Dream, 22 Mar 2007 @ 6:07am

    Time to make contacts

    I've known people that had contacts in foreign nations for the purpose of shipping imports. It would seem that people in the UK are gonna start doing the same. Looks like UK myspace users are gonna start making even more international friends...

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 22 Mar 2007 @ 11:49am

    It's the judge's job to rule on the law. Blame the law not the judge.

    reply to this | link to this | view in chronology ]

  • identicon
    Angry Bill, 6 Mar 2010 @ 5:32am

    Makes your blood boil

    The law is open to interpretation and on that basis I think that the company CD Wow should appeal this dreadful decision.
    After this decision there must be a lot of companies in other fields who are shaking in their boots because they import goods in to UK cheaper from other countries than they can buy from suppliers here. The greed is sickening and we should all stop buying ANY of these GREEDY COMPANIES PRODUCTS who are part of this corporate, greedy clique, who want to walk all over the people and their freedom of choice.
    For years the Americans were paying $6 for a CD which we were paying £8-£12 for depending on where you bought it (more than double the price, and they were complaining then ).
    The only good thing about money is that it is highly portable, we can spend it anywhere. Exercise that right and buy other companies products instead, in order to hurt them right in the wallet.

    reply to this | link to this | view in chronology ]


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here



Subscribe to the Techdirt Daily newsletter




Comment Options:

  • Use markdown. Use plain text.
  • Make this the First Word or Last Word. No thanks. (get credits or sign in to see balance)    
  • Remember name/email/url (set a cookie)

Close

Add A Reply

Have a Techdirt Account? Sign in now. Want one? Register here



Subscribe to the Techdirt Daily newsletter




Comment Options:

  • Use markdown. Use plain text.
  • Make this the First Word or Last Word. No thanks. (get credits or sign in to see balance)    
  • Remember name/email/url (set a cookie)

Follow Techdirt
Special Affiliate Offer

Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Recent Stories

This site, like most other sites on the web, uses cookies. For more information, see our privacy policy. Got it
Close

Email This

This feature is only available to registered users. Register or sign in to use it.