The British Phonographic Industry (BPI), the record industry's trade association, pursued a contempt of court order against CD Wow after it failed to fulfil its part of the deal. In January 2004, CD Wow told London's High Court that it would cease to illegally import CDs and music DVDs from southeast Asia.
However, in February the court ruled that the retailer was 'in substantial breach' of this agreement. At the time, BPI general counsel Roz Groome said: 'We believe CD Wow is guilty of flagrant and systematic breaches of a High Court order. The penalties for such breaches can be significant. Contrary to some reports, this case is nothing to do with price. Plenty of retailers manage to sell CDs at competitive prices without breaking the law.'
The Entertainment Retailers Association (ERA) described the ruling as good news for consumers, arguing that unfair competition from CD Wow's Asian imports posed a threat to the diversity of entertainment retailing.
ERA director-general Kim Bayley said: 'The UK has the most diverse and sophisticated entertainment retailing market in the world, something which is in the interests of both artists and music fans. In order to maintain that retail base, it is vital that all retailers compete on a level playing field. Illegal imports threaten that level playing field and threaten UK jobs. We therefore welcome the judgment against CD Wow.'
CD Wow is the UK's third biggest online music retailer and has a 23 per cent share of the online CD album market. Its retail sales were£21.7 million in the UK in 2005.