Ohio, 39 States Settle with Sony BMG over Anti-copying Software

December 28, 2006

SONY BMG Music Entertainment has agreed to pay Ohio and 39 additional states $4.25 million to resolve the states’ investigation into problems that arose when SONY placed anti-copying software on music CDs without notifying consumers.

“The Consumer Sales Practices Act states that all terms of a product must be disclosed to the consumer before they buy it. SONY’s hidden software violated Ohio laws and put consumers’ computers at risk,” Ohio Attorney General Jim Petro said. “Companies selling CDs and computer software need to disclose all that the consumer will be getting with the purchase.”

Under the terms of the settlement, SONY will provide refunds up to $175 to all consumers whose computers were harmed when they sought to remove the anti-copying software. Refund claims must be submitted to SONY through a claims process which will be publicized on its website.

The states had alleged that SONY distributed more than 12 million CDs in 1995 with two kinds of anti-copying software. Consumers were not informed on the outside of the CD boxes or elsewhere that the CDs contained the software. One version of the software, called XCP, was designed to hide or “cloak” a number of the program’s files. So when consumers played XCP CDs in their Windows-based computers, they unknowingly were downloading the anti-copying software. Consumers complained that XCP created vulnerabilities on Windows-based computers by exposing them to viruses and other security exploits, and some consumers who tried to remove the software ended up with more problems when their CD ROM drives crashed.

The states also alleged that another version of the anti-copying software used by SONY, called MediaMax, caused a driver to download on a consumer’s computer even if the consumer declined to accept the software. One version of MediaMax, Media Max 5.0, also created a security breach on consumers’ computers, by allowing subsequent users the ability to modify the contents of the computer, and to run dangerous programs that they would not otherwise have been able to run.

The injunctive relief provisions of the settlement will specifically prohibit SONY BMG from using XCP or MediaMax DRM software in the future, and will sharply limit the ways in which anti-copying software may be used in the future.

Besides Ohio, other states participating in the settlement are: Alabama, Alaska, Arizona, Arkansas, Connecticut, Delaware, Florida, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Michigan, Mississippi, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming, and by the Attorney General for the District of Columbia.

Source: Ohio Attorney General’s Office

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