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Preliminary Settlement Reached With Sony-BMG
December 30, 2005
Sony-BMG’s worries are far from over, but they appear close to settling at least some aspect of it. As many know by now, the media giant has been consumed in a whirlwind of controversy surrounding its inclusion of XCP and SunnComm MediaMax copy protection technology. At its best, it was labeled a significant security vulnerability. At its worst, it was labeled a virus-ridden hybrid of spyware and malware.The revelation of Sony-BMG’s rootkit software prompted a torrent of class action lawsuits. One of the first lawsuits filed was by California law firm Girard Gibbs & De Bartolomeo. So serious was Sony-BMG’s violation against the customer the EFF (Electronic Frontier Foundation) filed its own class action lawsuit on November 21.
Perhaps reflecting the most gravity on the situation, Texas Attorney General Greg Abbot launched his own investigation into Sony-BMG for violation of the state’s recently passed “Consumer Protection Against Computer Spyware Act.” Originally filed on the November 21, the initial investigation was only limited to the XCP (Extended Copy Protection) protection scheme. The investigation widened when it was learned that SunnComm’s Media Max software installed software despite refusing the EULA and was found similar in nature to the XCP scheme.
The initial private rounds of class action lawsuits appear to be nearing resolution. Girard Gibbs & De Bartolomeo and Sony-BMG have submitted a preliminary settlement to the Federal District Court of Lower New York. In principal, the proposed settlement requires the following from Sony-BMG:
• stop manufacturing SONY BMG CDs with XCP software (“XCP CDs”) and SONY BMG CDs with MediaMax software (“MediaMax CDs”);
• immediately recall all XCP CDs;
• provide software to update and uninstall XCP and MediaMax content protection software from consumers’ computers;
• ensure that ongoing fixes to all SONY BMG content protection software are readily available to consumers;
• implement consumer-oriented changes in operating practices with respect to all CDs with content protection software that SONY BMG manufactures in the next two years;
• waive specified provisions currently contained in XCP and MediaMax software End-User Licensing Agreements (“EULAs”);
• refrain from collecting personal information about users of XCP CDs or MediaMax CDs without their affirmative consent; and
• provide additional settlement benefits to Settlement Class Members including cash payments, “clean” replacement CDs without content protection software, and free music downloads.
Considering the preliminary settlement covers most aspects of the initial complaint, it is likely the court will grant this motion. Strengthening this prospect is the EFF, who signed onto the preliminary settlement on Thursday.
“The proposed settlement will provide significant benefits for consumers who bought the flawed CDs,” said EFF Legal Director Cindy Cohn. "Under the terms, those consumers will get what they thought they were buying--music that will play on their computers without restriction or security risk. EFF is continuing discussions with Sony BMG, however, and believes that there is more they can do to protect music lovers in the future.”
However Sony-BMG’s troubles are only partially over. Although the initial class action lawsuits were significant, Sony-BMG true test is against Texas Attorney General Greg Abbot. Unfortunately for Sony-BMG, their good fortunes with the initial class action lawsuit will be limited. A press representative for Texas Attorney General Greg Abbot told Slyck.com the proposed settlement has no bearing on their investigation, and that their action was ongoing.
Sony-BMG faired well in the initial class action lawsuit, but may not be so lucky against Texas. If the Attorney General's investigation is successful, Sony-BMG may have to pay civil penalties of $100,000 per violation, pay attorneys’ fees, court costs, investigation costs and all “other relief that may show itself.”
• provide additional settlement benefits to Settlement Class Members including cash payments, “clean” replacement CDs without content protection software, and free music downloads.
Considering the preliminary settlement covers most aspects of the initial complaint, it is likely the court will grant this motion. Strengthening this prospect is the EFF, who signed onto the preliminary settlement on Thursday.
“The proposed settlement will provide significant benefits for consumers who bought the flawed CDs,” said EFF Legal Director Cindy Cohn. "Under the terms, those consumers will get what they thought they were buying--music that will play on their computers without restriction or security risk. EFF is continuing discussions with Sony BMG, however, and believes that there is more they can do to protect music lovers in the future.”
However Sony-BMG’s troubles are only partially over. Although the initial class action lawsuits were significant, Sony-BMG true test is against Texas Attorney General Greg Abbot. Unfortunately for Sony-BMG, their good fortunes with the initial class action lawsuit will be limited. A press representative for Texas Attorney General Greg Abbot told Slyck.com the proposed settlement has no bearing on their investigation, and that their action was ongoing.
Sony-BMG faired well in the initial class action lawsuit, but may not be so lucky against Texas. If the Attorney General's investigation is successful, Sony-BMG may have to pay civil penalties of $100,000 per violation, pay attorneys’ fees, court costs, investigation costs and all “other relief that may show itself.”
This story is filed in these Slyck News categories
Legal/Courtroom :: Other Lawsuits
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