CURRAN SETTLES WITH SONY FOR HIDDEN SOFTWARE ON CD’S

Maryland Attorney General J. Joseph Curran, Jr. announced today that his Consumer Protection Division, together with 39 other Attorneys General, is entering into a settlement with Sony BMG Music Entertainment relating to compact discs (“CDs”) sold by Sony that created security vulnerabilities in users’ computers. The settlement provides restitution to consumers and prevents Sony BMG from using anti-copying 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 anti-copying 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 caused problems on Windows-based computers by creating security vulnerabilities. Also, when consumers did discover XCP on their computers, they experienced problems when they tried on their own to remove the software. Some consumers’ CD-ROM drives were disabled when they removed the XCP software.

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 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 should be protected from hidden software files that can threaten their privacy and harm their computers,” Curran said. “I am pleased that consumers who were harmed by these practices will receive restitution.”

Under the terms of the settlement, SONY BMG will place claim forms on its web site and will provide refunds up to $175. Consumers who experienced harm to their computers when they sought to remove the DRM software should go to the website to download a claim form.

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, in accordance with restrictions in the agreement, SONY BMG must clearly and conspicuously disclose this fact to consumers.