Sony BMG Will Settle FTC Charges
January 30, 2007 at 11:25 AM (PT)
SONY BMG MUSIC ENTERTAINMENT has agreed to settle FEDERAL TRADE COMMISSION charges that it violated federal law when it sold 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. According to the FTC, the software also exposed consumers to significant security risks and was unreasonably difficult to uninstall.
Installations of secret software that create security risks are intrusive and unlawful.
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."
The FTC vote to accept the proposed consent agreement was 5-0. The FTC will publish an announcement regarding the agreement in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through MARCH 1, after which the FTC will decide whether to make it final. Comments should be addressed to the FTC, Office of the Secretary, Room H-135, 600 Pennsylvania Avenue, N.W., WASHINGTON, DC 20580.