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 "alliwantforxmasisapsp.com." 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?
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