Washington, DC - Interim Attorney General Eugene A. Adams announced today that SONY BMG Music Entertainment has entered into an agreement with the District and thirty-nine states to resolve state consumer-protection concerns stemming from SONY BMG's use of anti-copying software hidden on music CDs sold in 2005. The agreement, an Assurance of Voluntary Compliance or Discontinuance ("AVC"), settles an investigation into SONY BMG's nationwide distribution of anti-copying software that installed itself onto consumers' computers without their knowledge or consent. Under the terms of the settlement, SONY BMG will reimburse consumers up to $175 for repairs made to restore CD-ROM failures caused by use of CDs with the hidden anti-copying software.
During 2005, SONY BMG distributed more than 12 million music CDs with two kinds of anti-copying software. Neither the outside labels nor the information included in the CD packaging informed consumers that the CDs contained anti-copying software that would automatically install if the CD was played on a home computer.
One version of the software, XCP, hid a number of the program's files and operations so that consumers could not easily determine that XCP had been downloaded and installed onto their computers. XCP created vulnerabilities on Windows-based computers by exposing them to security exploits, including viruses and other problems. Some consumers who had discovered XCP on their computers tried to remove it and caused the CD-ROM drive to crash, making it unusable. Another version of the anti-copying software, MediaMax, caused software to be installed on a consumer's computer even if the consumer had declined to accept it. It also created security vulnerability on Windows-based computers that could allow viruses or other malicious code to be installed without detection.
"Consumers do not expect music CDs to contain hidden software which could expose their computers to viruses and other security risks," said General Adams. "Companies that use this type of technology must inform consumers, and give consumers the opportunity to make the choice about buying and using these products."
As part of the settlement, SONY BMG has agreed to pay a total of $4.25 million to the states for attorneys' fees, investigative costs, and consumer protection functions.
The AVC prohibits SONY BMG's use of XCP or MediaMax anti-copying software, and will sharply limit the way in which SONY BMG may use other anti-copying software. The AVC also prohibits the inclusion of certain consumer use limitations in the license agreement accompanying music CDs (the End User License Agreement, or "EULA"), and requires clear and conspicuous notice to consumers of any requirement, condition, or limit that applies to the use of SONY BMG's music CDs.
Reimbursement claims must be made directly to SONY BMG. The claim form and details will be provided by SONY BMG on a website to be set up for that purpose (or contact John McKay at 212-833-5520).
Consumers can exchange their music CDs containing XCP or Mediamax anti-copying software in accordance with the court-approved, nationwide consumer class action settlement, In re SONY BMG CD Technologies Litigation (Southern District of New York, No. 05-CV-9575 NRB, May 24, 2006).
Select the link below for more information on the settlement:
The other states participating in today's settlement are: Alabama, Alaska, Arizona, Arkansas, Connecticut, Delaware, Florida, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Tennessee, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.