The BPI's complaint, lodged in December last year, concerned the sale of CDs from the Play.com web site – CDs that had been bought cheaply overseas, allowing the Jersey-based company to undercut rivals in the UK.
The BPI argued that while the discs were genuine, they had been cleared for sale outside Europe only, and making them available for sale in the UK without the consent of the controller of the rights in the UK contravened copyright law.
The complaint of the BPI was that its members and its fellow claimants are the owners or the exclusive licensees of the UK copyright in titles being sold at the site; that the discs are being imported without their consent; and that this amounts to parallel importing. Such parallel imports are prohibited under UK copyright law.
In a statement released yesterday, the BPI announced that the action had settled. Play.com has agreed that it will not sell CDs that have been first placed on the market outside Europe to UK customers. It will only sell CDs that have first been placed on the European market to UK customers.
It is the same argument that the BPI used in a similar action against Hong Kong-based CD Wow!, persuading it to settle its case in January.
The cases mean that businesses cannot take advantage of cheaper CDs being sold outside Europe. According to the BPI, the higher prices simply reflect the higher costs within Europe.
The BPI explained:
"all of the costs in creating the music are accrued in Europe; the record industry has to charge European prices in Europe to stay in business. Just because prices are lower elsewhere in the world it doesn't mean they can be lower in Europe."
BPI Chairman Peter Jamieson added:
"All British-based record companies and all retailers – off-line or on-line – are adversely affected when product specifically designated for markets outside of Europe flows back into the UK. It is impossible to invest in, develop and market new British talent if we do not protect our legal rights to prevent parallel importing."
Play.com has not yet commented on the settlement.