WASHINGTON: Sony BMG Music Entertainment has agreed to pay consumers up to $150 each toward the cost of repairs of their computer systems damaged by using the company's music CDs that came embedded with a copyright protection software.
The U.S. Federal Trade Commission announced Tuesday about the settlement, which besides the payment part, also required the company, which a joint venture of Sony Corp. and Germany's Bertelsmann AG, to make further disclosures and to allow consumers to exchange the CDs at issue.
The commission has held that the digital rights management software the company had included in the CDs in 2005 violated federal laws. Sony BMG had shipped some 12 million CDs of 52 titles, which had the potentially damaging software.
These CDs, when played by consumers, installed the DRM software on their computers without their knowledge, restricting the types of portable devices that the music could be played on, limiting on the number of copies and monitoring consumers' preferences and sending the information back to Sony for possible marketing uses. The software was difficult to be removed once identified and left the computers vulnerable to attacks from hackers.
The commission's chairman Deborah Majoras said in a statement that the consumers' computers belong to them and companies must adequately disclose unexpected limitations on the customary use of their products so that consumers can make informed decisions regarding whether to purchase and install that content.
Sony BMG too issued a statement saying it is pleased to have reached this agreement with the commission. It did not give out any further comments.
All consumers who have bought Sony BMG CDs before 31 December 2006 can return and get replacements. The company will also pay up to $150 for damages caused by the security software and its removal. The facility will be available till 31 June 2007. Sony BMG also agreed to disclose limitations on the use of CDs in the future, and not to install software without first getting consent from consumers.
The music company had earlier settled a federal class action lawsuit in the U.S. covering related charges and cases with U.S. states, including California and Texas.
