Up to £20m could be returned to retailers after a court ruled that the licensing body which collects record companies' copyright fees from shops must repay excessive charges set in 2005.

The High Court's rejection of PPL (Phonographic Performance Ltd)'s appeal against an earlier Copyright Tribunal ruling means a fairer tariff will be set and PPL will have to refund all retailers who have overpaid for their licence since 2005. The new rates will be based on 2005 levels plus an inflation-based increase.

A consortium of businesses and trade associations including the Association of Convenience Stores (ACS) claimed the ruling as a victory for shops. "We are delighted that the High Court has recognised the unsustainable increases that PPL has tried to inflict on our members," said ACS chief executive James Lowman. "We now hope that PPL will act quickly to refund those licence payers who paid over the odds to offer background music to their customers in stores."

He added that the ruling would secure significant future savings for retailers.

British Retail Consortium director general Stephen Robertson said: "We've finally won a victory for fairness. Performers and record companies are entitled to be paid, but increases on the scale demanded were unjustifiable and out of reach for many retailers.

"It's been a long fight but we now have a level of tariffs that's fair for all parties."

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