Cheap CD seller slapped with injunction over pricing blame

The wrangling between CD-Wow and the British Phonographic Industry (BPI) has taken a new turn, with the industry body taking the CD and games seller to court over claims it misled customers over pricing.

The two have recently been to court over how CD-Wow had sourced its CDs – choosing to buy from traditionally cheaper areas like Asia rather than Europe – which ended in the music seller being forced to source its CDs from within Europe. The net result was that CD-Wow initially put up its prices – which is where the second spat begins.

The BPI claims that CD-Wow sent emails to its customers saying that the price hike had been imposed on it, when the matter of pricing was purely down to the online seller itself. The judge agreed and CD-Wow is now subject to a temporary injunction that means it will no longer be allowed to suggest that the price rise came as a result of a surcharge from the BPI.

A BPI spokesman told silicon.com that the association had received negative feedback due to the seller's comments on its pricing. "You're likely to get complaints from consumers if they think we're to blame for any price rise," he said. "Naturally we were disappointed that CD-Wow sought to mislead its customers in this way."

He said he hoped the injunction would change people's outlook. "Consumers should be aware that cases like these are not about pricing; retailers are free to set whatever price they like. We just want them to source legally. Amazon and the supermarkets have proven that you can sell CDs for under £10 and still make a profit," he said.

BPI-inspired or not, the CD-Wow prices have dropped back to their original £8.99 level, as the online music shop appears to have embarked on some unique cost-cutting measures.

"We've been working our little cotton socks off to source our chart albums within the EU at the lowest possible price and cutting our margins even more. There have been a few cutbacks in the office, I'm working out of the YMCA and using an etch-a-sketch as my PC was sold," the company said in an email newsletter.

One music industry insider said that the case probably stemmed from consumers' misperceptions of record companies. "The recording industry has been investigated numerous times over CD pricing in recent years. That could be down to their own PR... it seems that even consumers' groups are completely unaware of the millions of pounds the record industry invests in producing artists. The manufacturing costs are only a small part of the cost of a CD, yet many people still think £10 for a CD is too much."

CD-Wow's co-founder, Philip Robinson, declined to comment.

The case will be back in court on 1 March.