- The Washington Times - Tuesday, January 30, 2007

ASSOCIATED PRESS

Sony BMG Music Entertainment agreed yesterday to reimburse consumers up to $150 for damage to their computers from CDs with hidden anti-piracy software.

Sony BMG’s anti-piracy software limited the devices on which music could be played to those made by Sony, Microsoft or other Windows devices, according to the Federal Trade Commission, which announced the settlement.

The software also restricted the number of copies of the music that could be made to three, the agency said, and “exposed consumers to significant security risks and was unreasonably difficult to uninstall.”

“Installations of secret software that create security risks are intrusive and unlawful,” FTC Chairman Deborah Platt Majoras said.

The focus of the FTC action is not the limits themselves, she said, but the lack of notification.

“Ordinary experience with CDs would not lead consumers to expect these limits,” she said. “This was about disclosure.”

The settlement requires the company to allow consumers to exchange through the end of June the affected CDs bought before Dec. 31 and reimburse them up to $150 to repair damage done when they tried to remove the software. It also requires Sony BMG to clearly disclose limitations on consumers’ use of music CDs and prohibits it from installing software without consumer consent.

For two years, Sony BMG also must provide an uninstall tool and patches to repair the security vulnerabilities on consumers’ computers and must advertise them on its Web site. The company also is required to publish notices describing the exchange and repair-reimbursement programs on its Web site.

Sony BMG said it was pleased to settle the matter. The company did not admit wrongdoing, and the settlement is subject to public comment for 30 days, after which the FTC will decide whether to make it final.

In 2005, the company shipped more than 12 million compact discs on 52 Sony BMG titles, each loaded with one of two content-protection programs, and about 7 million of those CDs were sold. The software installed itself on consumers’ computers without their knowledge or consent.

Last month, the company settled similar cases with more than 40 states, agreeing to pay more than $4 million and to reimburse customers.

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