Sony BMG to pay for CD damage

U.S. regulators said Tuesday that Sony BMG Music Entertainment agreed to reimburse consumers as much as $150 for damage to their computers from compact discs with hidden anti-piracy software.

According to the Federal Trade Commission, which announced the settlement, Sony BMG’s anti-piracy software limited the devices on which music could be played to those made by Sony Corp., Microsoft Corp. or other Windows-compatible devices.

The software also restricted the number of copies of the music that could be made to three, the agency said, and “exposed consumers to significant security risks and was unreasonably difficult to uninstall.”

“Installations of secret software that create security risks are intrusive and unlawful,” FTC Chairwoman Deborah Platt Majoras said.

The settlement requires the company to allow consumers to exchange through the end of June the affected CDs purchased before Dec. 31, 2006, and reimburse them as much as $150 to repair damage done when they tried to remove the software.

It also requires Sony BMG to clearly disclose limitations on consumers’ use of music CDs and prohibits it from installing software without consumer consent.

For two years, Sony BMG also must provide an uninstall tool and patches to repair the security vulnerabilities on consumers’ computers and must advertise them on its website. The company also is required to publish notices describing the exchange and repair reimbursement programs on its website.