Sony BMG Settles Over CD DRM

aurispector writes "Sony BMG Music Entertainment will pay $1.5 million and kick in thousands more in customer refunds to settle lawsuits brought by California and Texas over music CDs that installed a hidden anti-piracy program on consumers' computers. The settlements, announced Tuesday, cover lawsuits over CDs loaded with one of two types of copy-protection software — known as MediaMax or XCP. Although it's great to see this as a victory for consumers, I can't help but wonder about the next wave of DRM schemes."

The Best Democracy Money Can Buy

[dada21]

Each State gets $750,000 -- customers will share "thousands more."

Nice. Real way to protect the consumer.

Cheap DRM Research

[mandelbr0t]

Doesn't sound like Sony got particularly chastised here. If I were Sony, or any other company interested in inflicting DRM on my customers, I'd happily pay the fees that they're talking about here. Total cost is less than $10M, which is a drop in the bucket for a large, multi-national corporation. If they succeed in inflicting their DRM, they win by taking our rights away. If they lose, then they get some R & D done about how to do better next time. If this judgement were to mean anything to the consumer, there would have to be significant punitive damages as well (I'm thinking in the neighbourhood of $100M or more).

Either way, not much to see here. Big company does nasty things with DRM, gets caught, walks away with dignity and wallet intact.

mandelbr0t

Tagged Peanuts

[Anonymous Coward]

I wish I could engage in legally questionable activity in order to get billions of dollars, then only pay a measly 1.5 million for the privilage.

Next Step

[Mateo_LeFou]

Is anyone going after the antivirus/antispyware companies whose offerings gave the rootkit a pass?

hidden anti-piracy program?

[Anonymous Coward]

It was a damn rootkit!

Re:Tagged Peanuts

[ScrewMaster]

Legally questionable, ethically suspect, morally bankrupt.

This is sad.

[urbanradar]

Everyone saw it coming, but it's still sad. If I broke into your house and got caught, I would never get away with simply having to replace the broken lock and saying I'm sorry. But when Sony violate their customers' rights as gravely as they did, they get away with paying what amounts to little more than a token fee.

Comment removed

[account_deleted]

Comment removed based on user account deletion

Trusted Computing

[HAL9000_mirror]

"Although it's great to see this as a victory for consumers, I can't help but wonder about the next wave of DRM schemes."
With any disrupting technology, one can use it for "safer" computing or "treacherous" computing (remember P2P?!). It almost looks like entertainment industry is waiting to embrace this (one once it matures) and use it treacherously. BTW, my research area is trusted computing and I believe this technology is the first step towards safer computing. It is so very un-scientific to blindly disregard any technology at inception. All in all, you want it or not, corporations are going to push it into your home PC very soon...

Fair Compensation

[Alyred]

So, let's see. When Sony thinks that someone has "pirated" music, they sue them for, what, $1,500 per song, yet illegally invade people's computers and privacy and get off with a hundred dollars or so per person?

Where's the justice in that?

Why?

[ArcherB]

Why did the states take the settlement? There is no way that Sony could have won this. TX and CA should have rode it out!

1.5 Mil? Someone got paid

[BlueCoder]

60 million would be an insult. They spend more than that on ad campagnes. 1.5 million? That's like a paper cut. On the low side it should have been 200 million to settle. There is some serious corruption going on.

I Bet It's A Big Deal Internally

[sweatyboatman]

they certainly could continue putting rootkits on their CDs, but they're not in the business of giving money away. These companies are big, but the different divisions (and sub-divisions) all keep records of profits and losses. This is going to show up in a big way.

I can see the meeting now:

Muckety Muck: Last quarter your unit had profits of $1.5mil. But this quarter you have a loss of $.5mil. Care to explain?
Sony Music Exec: Well we put this DRM on our CDs and got sued and settled for $2mil.
Muckety Muck: I see. Did the DRM reduce piracy? Or increase sales?
Sony Music Exec: Well... we can't tell if it reduced piracy. And, ahem, sales kinda collapsed after people found out we were getting sued for it.
Muckety Muck: That might just qualify for the dumbest business decision this year! No bonus for you and I'm taking away your parking space.

so while for Sony it's not a big deal, you can bet that the people that made the decision to rootkit their CDs are scrambling to save their careers.

Re:Next Step

[Whiney Mac Fanboy]

Hmmmmn, while we should indeed go after the anti-virus vendors, I think the next step should be to ask why some sony exec isn't recieving jail time for deliberate malware distribution to millions of PCs.

Re:Not the DRM, the rootkit.

[Lux]

Right. Only they're not in trouble.

What about criminal charges?

[zentigger]

If I hacked into thousands of computers and installed a root kit without permission, I'm pretty sure I would be facing enough jail-time to seriously stretch my sphincter. In Texas, I bet that would probably be enough to get the chair! Someone should be going to jail for this kinda crap, and Sony should have their corporate charter dismissed and the assets seized. (corporate death sentence)

Re:I Bet It's A Big Deal Internally

[NeutronCowboy]

Personally, I see the exchange happening a little differently...

Muckety Muck: Last quarter your unit had profits of $1.5mil. But this quarter you have a loss of $.5mil. Care to explain?
Weasely Sony Music Exec: Pirates! Yes, Pirates! With swords and parrots! Our DRM just wasn't strong enough to hold them off. But if you give us another 2 million dollars, we have this surefire thing that is guaranteed to work!
Muckety Muck: You sound full of confidence, so you must be right. Here's another 2 million dollars.
\Weasely Sony Music Exec already working on how to use that money to gild his Gulfstream

I see very little scrambling that will be done by Execs. At most I see some fingerslapping for the poor guy who implemented it.

Completely unacceptable!

[gweihir]

First they should be criminally liable. What they did is computer-sabotage for commercial gain. Only prison-time is acceptable.

Second, they should have to pay everybody the cost of professional cleanup. I would say that is at least $150 per customer hit, probably more.

I think they got out of thi extremely cheap. Not acceptable for clearly criminal behaviour.

Re:What about criminal charges?

[mpcooke3]

Now, now, don't try and make out that the law would somehow treat you "differently" to Sony.

All you would need to do is become part or a cartel that engages in international price fixing, rip off millions of music lovers and thousands of artists, hire hundreds of lawyers and lobbyists and you too will get a decent legal defence.

Re:Next Step

[lightspawn]

Is anyone going after the antivirus/antispyware companies whose offerings gave the rootkit a pass?

How about the OS vendor that runs untrusted code off a CD without as much as bothering to inform the user?

Re:Just boycott these companies.

[NeutronCowboy]

Holy crap, batman - someone completely missed the point of a boycott. Note: you boycott a company if you decide that you are not going to buy their products regardless of their intrinsic merit. So yes, you boycott a company even if they release the best rear-projection TV ever, or if it comes with the kitchen sink and does your laundry, too. Finally - can I point out that you just placed watching TV on a nice TV set above having principles and following through with them?

Wow.

Re:Next Step

[mrchaotica]

No kidding -- and you know what the worst part is? If it had been an individual doing this, he would have gotten the jail time! But since it's a big corporation responsible, they get the best "justice" money can buy.

Anybody know the names of the dumbass judges/prosecutors that approved this? I, for one, would like to help them realize just how asinine this settlement is by bitching them out!

Re:Next Step

[xrobertcmx]

It could be worse. It could be like the Verizon Wireless coupon settlement that was just approved. $15.00 off your bill or a qualifying Verizon Wireless service. Customers no longer with Verizon Wireless must sign up for a Verizon Wireless plan to use the coupon. Tell me who approved that?

Re:Next Step

[Anonymous Coward]

Those companies were behaving in compliance with the DMCA. If they had detected it as a rootkit and removed it, they would have been circumventing DRM and guilty of a DMCA violation. The only outcome I would hope for if anybody sued them is the invalidation of the DMCA and those companies not eating any penalties, but I ain't holding my breath at this point.

Re:What about criminal charges?

[Ender Ryan]

Someone should be going to jail for this kinda crap, and Sony should have their corporate charter dismissed and the assets seized.

You know, I "hate" a lot of companies. In particular, I "hate" Microsoft -- although I only truly hate companies guilty of more egregious crimes. Not because they are the "most evil" company in the world, but simply because they interfere with my career, harass me at work, and have done a lot of damage in my industry(IMHO).

Still... MS corporate execs perjured themselves in court on a regular basis, to the detriment of the entire American public, throughout their whole anti-trust trial, and I never called for the disbandment of their entire company and the seizing of all their assets(how the parent got modded up... some mods must be demented). Do I think some of the top execs at MS deserve to do some time? Maybe. I believe they deserve a fair shake in court if it came to that.

Anyway, my point is this: many of you participating in this 2 minute hate, like the parent poster, are being absolutely fucking ridiculous.

That said, I do consider the "rootkit" to be criminal, and I do indeed think criminal charges should be considered. One must take into consideration, however, the "rootkit" was not developed by any division of Sony, and we cannot rush to conclusions that any of the Sony execs you folks are calling for immediate pound-me-in-the-ass sentences for had any idea what it was exactly they were doing.

Riiight. I'm sure a few other people care about being reasonable and objective... But let the furor will continue unabated.

Now go ahead. Call me a "fanboi" again.

Re:1.5 Mil? Someone got paid

[Anonymous McCartneyf]

So? People on the wrong side of copyright lawsuits, inc. the ones Sony files, are likely to pay more than a quarter of their yearly income to the RIAA.

Re:The Best Democracy Money Can Buy

[kimvette]

Especially considering that if $RandomSlashdotter hacked one of Sony's servers to install a rootkit and got caught, Sony would be seeking millions for that one single incident, plus jailtime.

Sony execs should be doing time over this.

Re:Next Step

[Afecks]

how to disable autorun [engadget.com]

3rd party program prompts before executing unknown code/drivers, prevents hooks, etc [diamondcs.com.au]

If Microsoft adds this stuff by default they are being anti-competitive. If they don't then they are selling an insecure OS. Basically they are damned if they do, damned if they don't. Windows has plenty of leaks but there are plenty of ways to plug them. The days of relying on Windows to include everything for you should have ended in 2001.

Re:1.5 Mil? Someone got paid

[Chowderbags]

And I'm sure that a copyright infringement suit would end up costing most people a lot more than 112% of their net income for a 3 month period.

But it's really much worse, because any individual who did what Sony did could be convicted under the Computer Fraud and Abuse Act, and sent to jail for up to a decade. Instead, Sony has to give up what, 10% of their profits over a 3 month period? Less than 3% of their yearly profit (give or take)? How is that justice?

Re:What about criminal charges?

[hey!]

That said, I do consider the "rootkit" to be criminal, and I do indeed think criminal charges should be considered. One must take into consideration, however, the "rootkit" was not developed by any division of Sony, and we cannot rush to conclusions that any of the Sony execs you folks are calling for immediate pound-me-in-the-ass sentences for had any idea what it was exactly they were doing.

If there is any uncertainty, a proper criminal investigation would eliminate it. There surely must be correspondence between Sony and the developer, including detailed product specifications.

There's a kernel of truth in what you say though. This kind of thing happens all the time in business, because normal people aren't inclined to examine their actions ethically. They go by what "sounds right", which is why the industry is so keen on the term "piracy".

If rootkit vendor had used the colloquial (but inaccurate) term "computer virus" to describe their product, Sony execs might well have been mortified. However, if the vendor described the actual operation of a rootkit in the context of reducing copyright infringement, carefully using neutral terminology, it is quite possible that the execs would see nothing illegal or immoral about it. Quite the contrary, since they were protecting their own legal and ethical rights, it might have seemed like a morally good thing to do.

Which is no excuse. You can't say "Gee, I guess I didn't think the consequences through very carefully," when you torch your neighbors house.