The Checkout

Stealth Doesn't Pay

It's been a bad couple of days to be a spokesman for Sony. There were two fires to put out yesterday--both of which stemmed from attempts at being "slick," as the kids like to say, with consumers.

Fire No. 1: Sony BMG--the music label that is a joint venture between Sony and Bertelsmann AG--said it would pay $1.5 million to settle lawsuits brought by the attorneys general of California and Texas over music CDs that installed anti-piracy software on consumers' computers without disclosing it. The software not only sent back information on what CDs consumers played, it also left computers vulnerable to hackers.

In addition to the settlement, Sony BMG also agreed to reimburse consumers for damage to their computers by the anti-piracy program. Consumers in Texas and California can apply to receive between $25 and $175 in refunds. Not sure where that leaves everyone else. The company sold about 12.6 million of the CDs nationwide between January 2005 and November 2005. The Electronic Frontier Foundation has compiled a list of some of the spyware-carrying CDs.

Fire No. 2: Sony received a flogging yesterday at the hands of bloggers over, well, some "flogging" -- fake blogging.

That's right. Sony pulled a Wal-Mart and was caught creating a phony blog to entice consumers into buying PlayStation game consoles.

According to Motley Fool, the "flog" was a video blog purportedly made by an amateur hip hop artist named Charlie called "" Charlie, the story goes, owns a PSP and has a friend who wants one.

There's no Charlie, of course, but a PR firm called Zipatoni. Once commenters exposed the "flog," Sony admitted it was an advertising vehicle and pulled it down.

(Posterity won't be denied. Someone saved a copy of the site. You can check out the "flog" here.)

This was not Sony's first foray into trumped up endorsements. In August 2005, the company settled a $1.1 million class action lawsuit after it invented a fake film critic to heap praise on two of its movies: A Knight's Tale, The Animal, and Hollow Man.

Sony might want to think twice about flogging again, given that the Federal Trade Commission recently said companies that fail to disclose a financial relationship between an endorser and a seller may run afoul of laws regulating deceptive advertising.

Thanks to the blogosphere, the embarrassment of getting caught trying to pull the wool over consumers' eyes ought to be enough of a deterrent. If it isn't, Sony has a lot more to worry about than the iPod.

Experts in consumer behavior say we can be surprisingly forgiving when it comes to lapses in competence, but we don't like to be deceived. Which do you think is worse? Incompetence or deceit?

By Annys Shin |  December 20, 2006; 11:45 AM ET Legal Battles/Settlements
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Incompetence is not knowing what you are doing or how to do it correctly.

Deceit is knowing how to do it, but finding other means to convey it that are deceptive to the audience.

Deceit is worse

Posted by: Radioactive Sushi | December 20, 2006 12:17 PM

Why can't anyone whose computer was damaged and hacked by Sony simply sue Sony for damages directly?

Posted by: I would | December 20, 2006 1:32 PM

Deceit is much worse. Incompetence is at well-intentioned. Deceit is not.

Posted by: Kev | December 20, 2006 1:41 PM

,,two of its movies: A Knight's Tale, The Animal, and Hollow Man.,,

So, was it incompetence or deceit? just kidding... ;)

Seriously though, incompetence is annoying beyond extreme, but deceit- despite running rampant in how corporations deal with consumers- should not be tollerated!

Posted by: Chris | December 20, 2006 2:33 PM

A class action suit was filed against Sony so consumers either ride on that one or pay a price to fight Sony in court. If you sue directly, it's going to cost you more than you would ultimately win.

The Sony issue was a good idea but it failed badly. And to make matters worse Sony had programed in that the software be hooked into the operating system so it couldn't be removed. Microsoft had to come in and save them. Actually Microsoft could have sued Sony for doing what they did, but they chose not to because MS supported Sony's efforts.

Sony's fancy spyware

Posted by: Radioactive Sushi | December 20, 2006 2:39 PM

".....its movies: A Knight's Tale, The Animal, and Hollow Man."

Is that not 3 movies?

Posted by: his was not Sony's first foray into trumped up endorsements. In August 2005, the company settled a $ | December 20, 2006 2:42 PM

Amazing how much advertsing they are getting form this issue.

Posted by: | December 20, 2006 4:22 PM

This is a slap on the wrist. Sony should have to pay for cleaning up every infected PC. The gov't should force Sony, on pain of indictment, to allow every affected consumer to go to a PC repair shop to have the offending malware removed, or pay every affected consumer for a new PC. As of now, Sony has no real economic incentive to not try this again. If Sony doesn't agree, they can go the way of Arthur Andersen.

But then, I'm sure Sony makes way too many campaign contributions to ever face justice.

Posted by: Garak | December 20, 2006 8:02 PM

Incompetence and Deceit are hallmarks of American values, which we have enshrined in the White House through, not one, but TWO elections.

I guess it's not incompetence and deceit we resent, it's just when someone else does it.

Posted by: Mike | December 21, 2006 5:45 AM

Sony's rootkit came to my son's PC off a CD he bought. It disabled the CD drive completely, and nothing I could do (Sony patches, third-party patches) could fix it. I ended up doing a complete Windows reinstall. That cost me lots of hours.

Not practical to sue directly, and I dislike most class action suits (I don't need a Sony coupon - which is what the "injured parties" will get).

What I have done is institute a total ban on ALL Sony purchases. I have purchased from Sony over the years TVs, VCRs DVD players, cameras and game consoles, not to mention CDs and DVDs. Since they violated my trust with their ill-advised and illegal invasion of one of our PCs we have as a family purchased exactly $0 worth of their products.

I encourage everyone to do likewise to the extent they can. That will get their attention and cost them more than the lawsuits.

Posted by: Rick | December 21, 2006 7:24 AM

Boycotting Sony is like hitting a whale with a wet tissue. Sony is in to so many things that many electronics and music and software bought today has at least a Sony part or device in it. You would not only need consumers to join you, but you would need manufactures and developers and engineers to join to even make a dent in Sony's bottom line.

Big business is hard to fight without large firepower behind you.

Posted by: Radioactive Sushi | December 21, 2006 8:22 AM

Virus's are illegal and punishable by prison. Root Kits are virus's therefore someone at Sony should be on trial.

Posted by: One Shot | December 21, 2006 8:48 AM

sony seems to do this alot...

sony (just like hummer) hit the streets with fake street art

Posted by: scott | December 21, 2006 8:57 AM

Here I am, I do not have and do not want a playstation.....I am laughing all the way to the bank...

Posted by: Laughing in Minnesota | December 21, 2006 8:58 AM

Hey Sony,

I had planed on buying my wife a 800 dollar camera and had settled on a Sony, guess what, your out of the bidding. You may sit well with the leadership and courts of this country, but the consumer will finally dictate your fate. I'll be sure to spread the word.

Posted by: Kricnit | December 21, 2006 9:00 AM

Hey Kricnit,

Sony isn't listening. They don't care.

Posted by: John | December 21, 2006 9:10 AM

it's simple really.....never ever purchase a Sony product in the future......that is my motto and it should be everyone's.....Microsoft has also compromised my trust through their intrusive Genuine Advantage program and their new licensing protocols. Thus, I've switched to Linux and tossed Sony and Microsoft products to the hounds....I am happy I did...

Posted by: Treeorc | December 21, 2006 12:45 PM

Another big company, another abuse of the consumer who has no rights or means to protect themself and must take the abuse because there are no alternatives available. The names change, but nothing else does.

Posted by: Chris | December 21, 2006 12:58 PM

Both worse. Ask Bush!

Posted by: Chris | December 21, 2006 2:18 PM

Now we should just call them Flony!!

Posted by: dh | December 21, 2006 2:22 PM

I agree with Treeorc; our main power as consumers is our purchasing power. I got burned by Sony when I first exchanged, then repaired, my PS2 for disc-read errors; to this day, I still get them. As a result, I'm apprehensive when purchasing a Sony product, so I don't do it anymore. Aside from being sold a defective PS2, I resent their subversive advertising; they paid graffiti artists to tag buildings with PSP ads without consulting the owners, and they also increased urban sprawl as a result. They created the fake blog, then there's the rootkit thing, I mean, they're out of control.

I won't buy so much as a computer diskette with 'sony' on it, and neither should you. When they start to notice their profits falling as a result of consumer choice, then they'll change their ways, otherwise, they'll continue seeing how far they can push us.

Posted by: SolitoN | December 21, 2006 5:25 PM

Sony is deceitful and incompetent. You have shown deceit with your mention of the CD's. But does anyone remember the exploding batteries and subsequent recall? Also, boycott blu-ray! We don't need another format war. I was never a fan of memory stick either for that matter.

Posted by: Anonymous | December 22, 2006 12:33 PM

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