Sony BMG Settles Anti-Piracy CDs Charges

The U.S. Federal Trade Commission said 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, 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.

The FTC said Sony BMG violated the law by embedding some music CDs with software that installed itself on consumers' computers and restricted the number of times the audio files
could be copied.

The software created security vulnerabilities that could allow hackers and other third parties to gain access to consumers' computers, the FTC said.

Sony BMG issued a statement saying, "We are pleased to have reached this agreement with the Federal Trade Commission." The company declined further comment.

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.