The British Phonographic Industry (BPI) is making a two-pronged attack on what it says are violations of copyright and trade laws.

The industry group is ramping up its efforts against online retailers selling CDs sourced from the Far East and Asia and users of peer-to-peer (P2P) sites.

Web surfers can save up to 50 per cent when shopping for music with popular online retailers such as CDWow.

But in what is likely to be just the first of a number of legal battles, the BPI has forced CDWow to change how it sources its CDs.

Some online retailers make savings by importing products from the Far East and Asia where prices are lower because overseas record companies take a smaller percentage of sales income.

This is known as parallel importing, which the BPI claims is in breach of European trading laws.

The BPI brought a case against CDWow, but it was settled out of court in late January. CDWow will now only sell CDs that have first been placed on the European market to UK and Irish customers.

The net effect will be an average price rise for CDWow customers of between £2 and £3, the company claimed.

The BPI is also turning its eye on Amazon.com and e-tailer Play.com for similar alleged infringements of European law.

At the same time the BPI has warned that it may launch legal action against people who swap music files on P2P sites.

This reflects growing frustration within the music industry, which has been trying to stop internet users sharing copyrighted music files.

The move follows in the footsteps of the Recording Industry Association of America, which began court action against a number of alleged P2P users in September last year.

The legal framework to allow the BPI to sue users is already in place thanks to the recently revised Copyright Directive, but that the organisation still preferred to educate P2P users.

And BPI director general Andrew Yeates, warned that the BPI could bring injunctions against ISPs as a means of trying to obtain the names and addresses of suspected file sharers. ISPs have said they would fight such a move.

"It would be the next step for the BPI. We are not in the business to sue for the hell of it, but we have an active dialogue with ISPs and work with them," said Yeates.