Washington, D.C. (January 30, 2007): The Federal Trade Commission (FTC) released today notice of a settle agreement with Sony BMG Music Entertainment.
Sony BMG Music Entertainment was charged with violating federal law by selling CDs without telling consumers that they contained software that limited the devices on which the music could be played, restricted the number of copies that could be made, and contained technology that monitored their listening habits to send them marketing messages.
The proposed settlement requires Sony BMG to clearly disclose limitations on consumers’ use of music CDs, bars it from using collected information for marketing, prohibits it from installing software without consumer consent, and requires it to provide a reasonable means of uninstalling that software. The settlement also requires that Sony BMG allow consumers to exchange the CDs through June 31, 2007, and reimburse consumers for up to $150 to repair damage to their computers that they may have suffered in trying to remove the software.
“Installations of secret software that create security risks are intrusive and unlawful,” said FTC Chairman Deborah Platt Majoras. “Consumers’ computers belong to them, and companies must adequately disclose unexpected limitations on the customary use of their products so consumers can make informed decisions regarding whether to purchase and install that content.”
According to the complaint detailing the charges, Sony BMG embedded in its music CDs content protection software, also known as Digital Rights Management software, which installed itself on consumers’ computers to restrict the number of times the audio files could be copied. It also prevented the music from being played on certain portable digital devices. The music could not be transferred directly to iPods, for example. In addition to restricting the use of the CDs on computers using the Windows Operating System, the software, which was concealed from consumers, created security vulnerabilities that could allow hackers and other third parties to gain access to consumers’ computers.
In addition, the complaint alleges that hiding the software from consumers and failing to provide a means to uninstall it also were unfair practices in violation of federal law.
The full FTC press release can be found here.
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