Sony BMG to Settle Class-Action Lawsuit
Sony BMG Music Entertainment has agreed to a settlement that would end a nationwide class-action lawsuit brought against the company over security flaws in anti-piracy software that it shipped on millions of music CDs.
The Sunbelt Software blog has a copy of the proposed settlement in the case, which was brought last month by a New York-based attorney on behalf of customers throughout the country who bought the affected CDs.
Sunbelt says the document it obtained is a preliminary settlement that was filed seeking judicial approval. After reading the document, I did a little investigating of my own using the court's PACER document lookup system and found another document -- a hearing order -- indicating that Sony BMG and the plaintiffs reached an agreement on Dec. 27 to settle the case.
The lead attorney for the plaintiffs, New York lawyer Scott Kamber, said the two parties signed a settlement which is awaiting preliminary approval by the U.S. District Court for the Southern District of New York.
"We have reached a settlement with all the parties and that settlement provides real value to the class in a timely manner," Kamber said. "This settlement is subject to court approval and no further comment would be appropriate from me at this time."
Sony BMG spokesperson John McKay confirmed that the company had reached an agreement with the plaintiffs, saying Sony is looking forward to the court approval process. He declined to comment further, however.
According to the terms of the settlement, Sony would be required to stop making CDs outfitted with the flawed "XCP" and MediaMax digital rights management software, programs that security experts showed not only destablized users' PCs but also opened them up to new threats from online attackers and viruses.
Sony BMG also would be required to "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; 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."
The agreement signed by the two litigants also requires Sony BMG to begin offering relief to customers directly after the preliminary agreement is approved, not after final approval is granted (which typically takes a few months). The agreement also states that both parties will issue a joint news release directly after preliminary approval.
The settlement also would lay to rest a class action suit brought against Sony by several other parties, including the Electronic Frontier Foundation. Still, the settlement will hardly end Sony BMG's legal troubles, though it may indicate that other settlements are imminent. The Texas attorney general's lawsuit alleging violations of the state's anti-spyware law is moving forward, and several other state attorneys general are considering legal action.
Any Security Fix readers who need a refresher on what this whole fiasco is all about can check out the Piracy section of this blog to read the more than 20 past posts on this subject dating back to Nov. 1.
Update, 5:43 p.m. ET:An earlier version of this post stated that the settlement does not affect a class-action lawsuit brought by the Electronic Frontier Foundation. EFF was one of the parties to this settlement. The above text has been corrected.
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