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Sony BMG Settles CD Software Suit

20 Dec, 2006 By: Erik Gruenwedel

The Calif. state attorney general and Los Angeles district attorney Dec. 19 announced that Sony BMG Music Entertainment would pay more than $750,000 in civil penalties and legal fees to resolve a lawsuit regarding allegations the record label in 2005 surreptitiously placed anti-piracy software on millions of CDs, causing damage to consumers' computers.

Under terms of the settlement, which mirrors a similar deal with the Texas officials, Sony BMG would provide refunds up to $175 to each California consumer who spent money to repair computers damaged trying to uninstall digital rights management (DRM) software.

An estimated 450,000 Californians purchased CDs with the software but were not notified of the presence of DRM that created security vulnerabilities in computers, exposing them to hackers and other problems.

In addition, consumers were not informed about “enhancement” software that allowed Sony BMG to communicate over the Internet with the consumer's IP address for marketing purposes.

“In trying to gain market share, companies need to be sensitive to consumers' rights to privacy, especially in this electronic age,” said Steve Cooley, L.A. district attorney.

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