Ruling that ends the sale of cheap CDs on the net

The leading web discount retailer - CD-Wow - was yesterday ordered to pay some £41million in fines and costs after breaking import rules.

The ruling means firms will be prevented from buying cheap genuine chart CDs sold legitimately in the Far East and then shipping them to the UK.

CD-Wow has been able to offer savings of up to 45 per cent compared to high street outlets in this country, so delivering big savings to fans of the likes of Amy Winehouse, Coldplay and Snow Patrol.

Albums which had an official list price of around £13 could be picked up for as little as £6.99 on the company's website.

However, music industry bosses objected to this attempt to circumvent their own distribution regime, which has imposed higher prices on the public.

The British Phonographic Industry took legal action against CDWow alleging it was breaking copyright rules in importing the CDs and flouting an earlier undertaking not to do so.

A High Court judge yesterday ordered the web store to pay £35million in damages, while the figure is expected to climb to £41million once costs and interest charges are added.

CD-Wow has always insisted that in a world of Internet retailing it was wrong for the music business to set up artificial barriers to trade, so blocking access to low prices.

Its philosophy has proved popular with consumers, with the result that the company sells around a quarter of all CDs bought over the Internet in this country.

However, the BPI argued the activities of CD-Wow and others was undermining the ability of retailers in the UK to operate.

The BPI boasted that the multimillion pound pay-out was the largest made in favour of the organisation.

It said the outcome "sets an important legal precedent as the industry seeks to prevent the illegal importing of CDs from outside Europe".

CD-Wow insisted it was a victim of a "policy of protectionism". Chief executive Henrik Wesslen said: "This spells disaster for millions of music fans who object to being ripped off by unnecessarily expensive albums.

"The artists do not lose out, only the middle man does."

The company is considering an appeal. BPI's chief executive Geoff Taylor hit back, saying: "Imports of this kind undermine the huge investments made by businesses here in homegrown musical talent.

"The vibrancy of British music depends on a fair return on the investments that allow British talent to shine.

"The BPI says the case would be a deterrent to any 'would-be illegal importers'."