Sony BMG settles with FTC over DRM charges

Posted by Seán Byrne

After Sony BMG caused such a backlash over the sale of DRM infected Audio CDs, including some with dangerous rootkit based software that resulted in legal action, Sony BMG Music has now agreed that it violated federal law by selling these discs with no indication that they contained DRM software that also monitored their listening habits to use for sending them marketing information.  According to the Federal Trade Commission, Sony has agreed to allow consumers to get their affected discs exchanged and be reimbursed up to $150 to cover the costs of removing any damage caused by the culprit software.

Not only did the copy protection restrict the number of copies one could make of the affected discs, the software also opened up security holes, would install automatically upon loading the disc without asking or letting the user know first and could not be easily uninstalled, at least until Sony provided a removal tool.  According to the FTC Chairman, Deborah Platt Majoras, the installation of secret software that creates security risks is both intrusive and unlawful.

Sony has already paid $4.25 million in a class-action lawsuit over the same DRM related issues just a month ago, in which it had to make any copy restrictions clear on music CDs, require consumers’ consent to install software, provide a reasonable means toy uninstall the software and to no longer collect information for marketing purposes.

As I mentioned many times before, with the music industry trying to tackle the major problem of CD piracy and music shared over file sharing networks, it is very unwise of them to continue trying to restrict what consumers can do with genuine music purchases.  Not only does this start making pirate alternative more attractive to frustrated consumers (since pirate copies lack the restrictions), but it will certainly make those who already download music from file sharing networks or purchase pirate CDs think twice of buying from a genuine source if they know this is what they will have to put up with.  With the vast majority of songs only available legally as a DRM protected tracks online and the growth of copy protected CDs, I wonder if the music industry has put some serious thought at copy protection as the main culprit behind declining sales.

Thanks to DamnedIfIknow and our system admin Liggy for letting us know about this news.  DamnedIfIknow added:  Sony has admitted that it’s XCP/MediaMax digital rights management software violated U.S. federal law and agreed to fix any consumer’s PC that was damaged by it to the tune of $150. No details on how to file a claim are available at this time.