Office of the Attorney General
Attorney General Greg Stumbo Announces Important Consumer Refund Information from Sony BMG for Music CD Snafu

Press Release Date:  Friday, December 22, 2006  
Contact Information:  Vicki Glass, 502-696-5643 Office  

Attorney General Greg Stumbo announced today that SONY BMG Music Entertainment has agreed to pay the Commonwealth of Kentucky and 39 additional states the sum of $4.25 million to resolve the States’ investigation into problems that arose when SONY BMG placed anti-copying software on music CDs.

The settlement, an Assurance of Discontinuance, filed with the Suffolk County Superior Court Department, also sets forth SONY BMG’s agreement to broad injunctive relief terms which will prevent SONY BMG from using anticopying software on its music CDs in the future without first complying with the reforms required by the settlement.

During 2005, SONY BMG distributed more than 12 million CDs with two kinds of anticopying software. SONY BMG did not inform consumers on the outside of the CD boxes or elsewhere that the CDs contained anti-copying software or Digital Rights Management (DRM) software. One version of the software was called XCP and this software was designed to hide or “cloak” a number of the program’s files and operations so that when consumers played XCP CDs in their Windows-based computers, consumers did not know that the anti-copying software was downloaded onto their computers. XCP created vulnerabilities on Windows-based computers by exposing them to security exploits, including viruses and other problems.

Also, when consumers did discover XCP on their computers, they experienced problems when they tried on their own to remove the software. Some consumers who tried to remove XCP had their CD- ROM drives crash.

Another version of the anti-copying software used by SONY BMG, called MediaMax, caused a driver to download on a consumer’s computer even if the consumer declined to accept the software. One version of MediaMax, Media Max 5.0, also created a less significant security vulnerability on consumers’ computers, by allowing subsequent users the ability to modify the contents of the computer, and to run dangerous programs that they would not otherwise have been able to run.

“Consumers do not expect music CDs to contain hidden software which could expose their computers to viruses and other security risks,” said Attorney General Stumbo. “If companies want to use technology to protect their interests, they need to be up-front with consumers, and give consumers the opportunity to make informed choices about buying and using these products.”

Under the terms of the settlement, SONY BMG will provide refunds up to $175 to all consumers who experienced harm to their computers when they sought to remove the DRM software. Refund claims must be submitted to SONY BMG through a claims process which SONY BMG will publicize on its website.

The injunctive relief provisions will specifically prohibit SONY BMG from using XCP or MediaMax DRM software in the future, and will sharply limit the ways in which SONY BMG may use anti-copying software in the future. If it does choose to use DRM software in the future, SONY BMG must inform consumers about it.

The other states participating in today’s settlement are: Alabama, Alaska, Arizona, Arkansas, Connecticut, Delaware, Florida, Idaho, Illinois, Indiana, Iowa, 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, and by the Attorney General for the District of Columbia.