Sony Settles California 'Spyware' Suit

by Glen Shapiro, Lawandtax-News.com, New York

29 December 2006

Sony BMG has settled another of the suits brought against it by US states after it included 'spyware' in millions of CDs without telling the buyers. The company will pay the Attorneys-General of California and Los Angeles county US$750,000.

The company will also pay up to $175 to any consumer in California who can provide proof that 'damage' was done to a computer. The spyware, known as Digital Rights Management software, and intended to prevent buyers from distributing music onwards, instals a hidden 'rootkit' on a computer which, claim opponents, can make it easier for viruses or hackers to break into the computer.

Beginning in 2005, a number of states sued Sony BMG under their Digital Rights Management laws; the company also faced numerous class actions, which were mostly settled at the beginning of 2006.

In January, US New York District Judge Naomi Reice Buchwald granted tentative approval to a settlement agreement put forward by Sony BMG in connection with some 15 of the class actions. Under both of the two packages offered in the settlement agreement, affected consumers are able to exchange the discs for duplicates without the antipiracy technology. Under the first package plaintiffs received $7.50 in cash plus the option to download an additional album for free, whilst under the second, they were permitted three free downloads.

Some states, including Texas, still have outstanding suits against the company, though many have been settled. “Sony has engaged in a technological version of cloak and dagger deceit against consumers by hiding secret files on their computers,” argued Texas Attorney General Abbott, launching the suit in 2005. He said: “Consumers who purchased a Sony CD thought they were buying music. Instead, they received spyware that can damage a computer, subject it to viruses and expose the consumer to possible identity crime.”

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