Amazon.com under spotlight over 'grey' CD imports

Internet shopping in the UK could face an upheaval as the music industry gears up for a legal assault on ecommerce sites based overseas that are selling CDs to UK consumers and businesses.

According to the FT, e-tail giant Amazon.com is being investigated by the British Phonographic Industry (BPI), which suspects it may be breaking copyright law by shipping CDs from overseas to UK customers.

Two other e-tailers, Play.com and CD Wow, have also been investigated by the BPI. Next month, the BPI will tell the High Court that Hong Kong-based CD Wow is breaking the law by buying CDs in Asia, importing them into the UK and selling them cheaper than UK-based retailers without the permission of the copyright owners.

Sites such as Play.com and CD Wow are popular with some web users, as their wares are often significantly cheaper than those of UK-based rivals. Unlike Amazon.com, both sites offer free delivery on top of prices that are typically much lower than the recommended retail price.

But the BPI is expected to argue in court that this action constitutes "parallel importing", where a supplier buys items in one country and ships them into a second country where the items are more expensive, because the brand owner charges a much higher price.

After a high-profile court battle between Tesco and Levis over the sale of cut-price jeans, the European Court of Justice ruled in 2002 that the importation of trademarked goods into European countries for resale was only allowed if the trademark owner has given 'unequivocal, positive consent' to such importation.

According to Amazon.co.uk, there's no suggestion that it is being investigated by the BPI but a company spokeswoman wasn't able to speak on behalf of Amazon.com - which is expected to give its view on the issue later on Wednesday. The e-tailer has already insisted that it respects the copyright laws of every country it operates in.

The BPI had also failed to respond to a request for comment at the time of writing.