Sony BMG Settles Class-Action Suits Over Copy Protection
Sony BMG has settled class-action claims against 2 copy-protection technologies used on some of its CDs. The damages awarded are slightly different for buyers of CDs with First4Internet’s XCP technology, which drew notice for its “rootkit” installation that created PC vulnerabilities, and SunnComm’s MediaMax, which installed itself on PCs without user consent. Patches to fix vulnerabilities in XCP and MediaMax created their own vulnerabilities.
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The U.S. Dist. Court, Manhattan, must approve the proposed settlement. Sony can withdraw “if the number of timely and valid requests for exclusion” from the settlement class is more than 1,000. SunnComm and First4Internet can also withdraw from the settlement before Jan. 15 or the date “notice is first disseminated.” The firms weren’t able to review the settlement with their insurance carriers during the Dec. holidays, the settlement said.
The settlement doesn’t mean Sony is pulling away from copy protection. One provision prevents Sony from manufacturing CDs with MediaMax for at least 2 years, but not indefinitely, and sold MediaMax CDs won’t be recalled, as with XCP. But Electronic Frontier Foundation (EFF) Legal Dir. Cindy Cohn told us she hopes the experience will give other labels pause when considering the use of copy protection or other DRM schemes: “There’s nothing here that happened to Sony that makes it anomalous.”
The class-action counsel and Sony had “virtual round- the-clock settlement negotiations” for about a month, the settlement said. The parties has rushed to hammer out a settlement in hopes that a pact could be reached before the holiday buying season, Cohn said. EFF filed its own suit against Sony and participated in negotiations.
Under the settlement, Sony will: (1) “Immediately” recall all CDs with XCP, first started in Nov. (2) Provide software to “update and uninstall” XCP and MediaMax from affected computers. (3) Ensure all “ongoing fixes” to its copy-protection software “are readily available to consumers.” (4) Make “consumer-oriented changes” in CDs that carry other copy-protection technologies in the next 2 years, by preventing download without user consent, including an uninstaller on CDs, writing the end-user license agreements (EULAs) in “plain English,” and verifying from a qualified 3rd party that the technology doesn’t create known security vulnerabilities. It will waive certain rights in the EULA for each technology, and stop collecting information through the Internet from users running Sony CDs on their PCs “without their express and affirmative consent.” If Sony provides additional benefits to some class members through “any government authority,” those benefits will be extended to all class members.
Users with XCP-protected CDs can exchange them, free of charge through mail, for “clean” CDs with no such protection. They can also send a receipt showing they returned or exchanged the affected CDs after Nov. 14, 2005. Buyers can further choose from 2 incentive packages, letting them either claim a cash payment of $7.50 and one free album to download from 200-plus titles, or 3 albums to download from the same list. Promotion codes to download albums from the 3 major download services will be valid for 6 months Sony will use “commercially reasonable efforts” to offer the free downloads through iTunes, which hasn’t previously been compatible with its copy-protected CDs. MediaMax- protected CD buyers will get one free album download and the right to download unprotected MP3 versions on the MediaMax CDs they purchased.
The settlement doesn’t address other issues. Users claiming their computers were damaged through vulnerabilities created by XCP and MediaMax can still sue Sony, but also collect the settlement awards. Cohn said EFF has “heard of some [users with damaged computers] and we think there will be more to come,” but “finding a pattern [to the damages] has been pretty hard,” meaning a class-action suit on computer damage claims might be difficult to file.
EFF is working with Sony on how to provide settlement notice to the class members. Plaintiffs want the court to require notice to affected consumers through e-mail, Internet postings and banner advertisements, search engines, print publication in several newspapers and a joint release from Sony and the plaintiffs’ counsel. Though “there’s still more we'd like to see Sony do,” overall EFF is pleased: “These technologies are done, finished, over.”
The settlement won’t affect the Tex. attorney general’s case against Sony under state law, a spokesman told us: “Our case is certainly different than those class action suits,” and “our position stands steady.” He declined to say whether the settlement would be taken by his office as a good-faith sign from Sony.