[Intrepid Homoludens]

Sony BMG Sued Over CD's With Anti-Piracy Software | The New York Times, November 22, 2005

In separate legal actions yesterday, the Electronic Frontier Foundation, an influential digital rights advocacy group in California, and the Texas attorney general filed lawsuits against the music publisher Sony BMG, contending that the company violated consumers' rights and traded in malicious software.

They are the latest in a series of blows to the company after technology bloggers disclosed this month that in its efforts to curb music piracy, Sony BMG had embedded millions of its music CD's with software designed to take aggressive steps to limit copying, but which also exposed users' computers to potential security risks.

The copy-protection software, called XCP, was bought by Sony BMG from a British company, First 4 Internet, and was installed on 52 recordings, totaling nearly five million discs, according to the music publisher, which is jointly owned by Sony and Bertelsmann.

In response to the concerns, the company posted a public apology on its Web site last week, began recalling the affected CD's from retail and warehouse shelves and offered restriction-free versions of the CD's - as well as MP3 files - to consumers in exchange for purchased CD's carrying the XCP software.

In a telephone call yesterday, Daniel M. Mandil, general counsel with Sony BMG, said that the company was "very keen to open up a dialogue with the Texas attorney general's office." And Thomas Hesse, Sony BMG's president for global digital business, added that "as a company, we are deeply committed to fixing this problem, and we are doing everything we can to get this right."

Cory Shields, a Sony BMG spokesman, also said that in mounting the recall and exchange program, the company had already responded substantially to concerns raised by the Electronic Frontier Foundation.

The class-action suit filed by the foundation in State Superior Court in Los Angeles County yesterday, however, takes aim at a much broader range of Sony BMG titles than those identified in the recall - including 20 million CD's that used copy-protection software from another company, SunnComm International of Phoenix.

Sony BMG contends the SunnComm software has been installed on only 12 million CD's. In a letter to the foundation on Friday the company stated that while it would be "reviewing its use of copy protection on all of its compact discs," it did not believe that the SunnComm discs needed to be removed from the market.

Cindy Cohn, the legal director for the foundation, however, said that both the First 4 Internet and SunnComm copy-protection systems, at the very least, violated consumers' rights by failing to disclose properly what sort of software would be installed when they listened to the CD's on their computers, and what exactly that software would do.

Users do have to accept "license agreements" that appear on their computer screens before playing CD's protected by the First 4 Internet and SunnComm software, but the foundation called the terms of those agreements "outrageous" and "anti-consumer."

Only consumers playing the discs on Windows-based PC's are known to be affected by the copy-protection programs. Studies have shown that about 36 percent of CD buyers listen to the discs on a computer.

At least six other class actions have been filed against the company.

Meanwhile, the Texas suit against Sony BMG, which refers only to the copy-protection software developed by First 4 Internet, seeks $100,000 per violation of the state's Consumer Protection Against Computer Spyware Act, which was passed by the Texas Legislature last spring and went into effect on Sept. 1.

It is the first such state action against Sony BMG.

"What's wrong about all this is that in an effort to protect against illegal copying, it was Sony BMG that engaged in illegal conduct," said the Texas attorney general, Greg Abbott. He added that Sony's desire to protect its intellectual property, however well intentioned, did not entitle it to violate Texas anti-spyware statutes.