The U.S. Federal Trade Commission said on Tuesday Sony BMG agreed to settle charges that it secretly embedded potentially damaging anti-piracy software in some of its CDs.
The settlement requires Sony BMG, a joint venture of Sony and Germany's
Bertelsmann AG , to make further disclosures, to allow consumers to exchange
the CDs at issue and reimburse consumers for up to $150 to repair any damage to
their computers, the FTC said.
"Consumers' computers belong to them, and companies must adequately disclose
unexpected limitations on the customary use of their products so consumers can
make informed decisions regarding whether to purchase and install that
content," FTC Chairman Deborah Majoras said in a statement.
The FTC said Sony BMG violated the law by embedding some music CDs with
software that installed itself on consumers' computers without their consent
and restricted the number of times the audio files could be copied. It also was
used to help send them marketing messages, the FTC said.
The software was "unreasonably difficult to uninstall" and created security
vulnerabilities that could allow hackers and other third parties to gain access
to consumers' computers, the FTC said.
The software at issue was included on millions of Sony BMG CDs sold in 2005,
the FTC said. The agency charged that it was deceptive because Sony BMG failed
to disclose adequately that software would be installed.
Sony BMG issued a statement saying, "We are pleased to have reached this
agreement with the Federal Trade Commission." The company declined to comment
further.
Last month, Sony BMG reached a nearly identical settlement with 41 states and
the District of Columbia. The company no longer includes the software on its
CDs.