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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."
You are still a bunch of no good thieves
Each State gets $750,000 -- customers will share "thousands more."
Nice. Real way to protect the consumer.
Sony is Doomed.
You are in a maze of twisted little posts, all alike.
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
"Please describe the scientific nature of the 'whammy'" - Agent Scully
"Sony BMG also agreed not to distribute any compact discs loaded with any copy-protection software that hinders computer users from easily locating it or removing it from their computers." So that means it'll still be there, just out in the open to let consumers get at it, which will be hidden by some other measure that will continue to piss off the consumer.
Sony, with $15.7 billion quarterly revenue? Would $1m even make it into the 10-Q's footnotes?
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.
Looks like about a 2 million dollar loss ($1.5m in direct damages, plus $175 per individual claim to be filed) for Sony for potentially installing this on 2 million (or more!)PCs. Is it just me, or does this almost seem like it can be worth it for Sony to keep going? This is a multinational conglomerate that was just... I want to say a slap on the wrist, but, it's not even that to them!
2^4 * 3 * 20929
Is anyone going after the antivirus/antispyware companies whose offerings gave the rootkit a pass?
My turnips listen for the soft cry of your love
It was a damn rootkit!
Thousands of unsold copies of some long-forgotten Mariah Carey album.
After having dealt with some of these people, I'd say the next wave is coming from a little company called SparkArt. They also get into 'Viral Marketing'. SA deals with Sony as well, so this little company would be one to keep an eye on in the future......
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.
Basilisk Digital
talk about a slap on the wrist, the fine is pocket change to a global corp. like Sony!
"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...
iTunes, RealPlayer and several other apps prove that it's possible to implement DRM without buggering the host OS. Sony's not in trouble for using DRM, they're int trouble for installing a rootkit.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
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 did the states take the settlement? There is no way that Sony could have won this. TX and CA should have rode it out!
There is no "I disagree" mod for a reason. Flamebait, Troll, and Overrated are not substitutes.
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.
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.
I'm sure the ashtray of the Sony CFO's Mercedes 600SEL will miss that pocket change.
Sometimes it's best to just let stupid people be stupid.
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 $2mil.
Muckety Muck: I see. Did the DRM reduce piracy? Or increase sales?
Sony Music Exec: Well... we can't tell if it reduced piracy. And, ahem, sales kinda collapsed after people found out we were getting sued for it.
Muckety Muck: That might just qualify for the dumbest business decision this year! No bonus for you and I'm taking away your parking space.
so while for Sony it's not a big deal, you can bet that the people that made the decision to rootkit their CDs are scrambling to save their careers.
It breaks my pluginses, my precious!
This story report is horrible! First it's the Sony rootkit. Name it as such. Not some "DRM" bullshit. Second: "victory for consumers" ? This is wrong on so many levels, I don't believe it. We are customers, not consumers. And no, it's not a victory, not at all. Sony did commit thousands of computer crimes for purely financial interests and got a slap on the wrist. Kevin Mitnick would be in Jail for 3000 years for this. And if my information is correct, the settlement states explicitly, that Sony does not recognize any guilt. Sorry for this rant. But how can such a misleading article be on the front page?
Why wonder about the next DRM scheme? It's simple: don't get caught. Malware that's so well hidden that you won't know about it.
think real hard about this one, .. given the choice consumers will choose non-drm over drm. It's really a hard sell to consumer. I'm for the unlimited download 5$/mo.club and the artist get paid directely from that, cut out the middleman, the artist/inventor get paid more money and that can be based on a useage of IP percentage.
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)
the above is my personal opinion and does not necessarily reflect that of the little voices in my head
Sony Suit: Well guys, looks like our DRM scheme tanked. But $1.5 is nothing. Muahaha. That's lunch money for me. What new stuff do you have?
Researcher John: Well, we got this thing where we can put in subliminal messages into the music that our customers buy. Stuff like "P2P and Piracy rapes your mom!" or "Buy more sucky and/or mediocre music!" or "Mike is a fag!"
Researcher Mike: Shut up John!
Sony Suit: Oh that's good stuff! Anything else?
Researcher John: Well, Mike has another idea.
Researched Mike: (holds up cute puppy) We can threaten to kill this cute puppy if they pirate stuff!
Sony Suit: EXCELLENT! (pets cute puppy) Woo's a cute puppy-wuppy! Woo's gonna die to pwotect our intewests!! Oooohh!! Sooo cute! Yesyouare!! Yesyouare!!
Vivin Suresh Paliath
http://vivin.net
I like
so as a consumer, am I still allowed to sue Sony for "hacking my computer and breaking it."? Probably not, eh? How about I got and install rootkit on some Sony's computer?
-------------------
say what's on your mind - online confession and anon email @ my website http://www.sayitt.com/
I get a feeling they billed Sony for more than $1,500,000. I realize they're already on the pay role, but I assume they still need to bill their time to the case their working on.
With Microsoft, you've got to PAY THEM to install virus-prone software on your computer...
Though the payout on these lawsuits isn't high, the story represents far more of a disincentive for music vendors to pursue shady DRM-like courses than most posters seem to recognize. The dollar value is low, but it sets a precedent, cost them money in legal fees as well as lost development investment, and most importantly makes would-be corporate coalition partners skittish.
Of course, I expect like-minded corporations to fund a fairly concerted lobbying effort after this to create some stealth legistlation legalizing whatever skullduggery they please. The bill will be called the Media Freedom Act or something like that.
I am the one true god. However, as an atheist, I don't believe in myself. I guess I have a self-esteem problem.
My sentiments exactly.
You mean the wave after the current wave of DRM we haven't detected yet?
Google's Super Secret Search Algorithm: SELECT @search_results FROM internet WHERE @search_results = 'good'
so, 1.5 million to each customer, right? otherwise, that's bullshit.
I see Windows, I see Mac. I see Linux on the rack.
A couple law firms in each state made some money, Sony expends more effort farting than it takes to make 1.5 million, and the people fucked over directly by their CRAPWARE get a shitty pittance.
Chas - The one, the only.
THANK GOD!!!
iirc 2 million pcs were affected, so everyone gets 75 cents?
The MAFIAA is a bunch of mindless jerks who will be the first up against the wall when the revolution comes
I mean, they did agree to pay $1.5 Milllllion dollars!
Now please excuse me, I need to count the 15 pennies that I'm now entitled to.
Fuck Sony.
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.
Most ACs are not even worth the keystrokes to insult them. Be generically insulted by this and ignored otherwise.
Electronic Warfare / Electronic Terrorism - what else do you call something that compromises 1,000s of government computers, business systems, and home computers?
The rootkit trojan fiasco deserved a military response.
If the source of this digital infection was a certain middle east Muslim country,
the Bush administration would have been tripping over itself to start another attack.
sony pays 1.5 mill. for their stupidicy.. wtf!! i smell some money being handled behind are backs. thats a billionare donating only 1.5 million every 5 years for charity.. it's freaking flip flopping fap fap fap fucking bullshit!!
Consumers need to wake up and just boycott these companies. There is no other way to set things right. We need to talk with our money. As long as foolish people keep buying their DRM infested garbage these companies continue to thrive. Doesn't matter how glittery and shiny their next new toy is, people must just say no. The zune is another top contender for this treatment. Together with the DRM infested BluRay players and stuff.
About a month ago, I bought a CD that had version three of the MediaMax software in Mexico, that infected my Windows XP machine. This was a two-year-old CD--they haven't pulled these CDs from the shelves down there.
The infection is actually quite easy to remove. The Wikipedia article details how to remove it. It's really simple:
sc query sbcphid
sc stop sbcphid
sc delete sbcphid
del \windows\system32\drivers\sbcphid.sys
"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.""
What did you expect when pirates declared war against content providers? Hugs and kisses?
You realize that this isn't the same DRM/Rootkit that is in controversy (XCP) here, right? (That's specifically noted in the Wikipedia article you cite.)
/. writeup totally confused: Read a better writeup. California and Texas have settled - five other states still get to rake Sony across the coals.
Shh.
My bad.
Shh.
"Consumers need to wake up and just boycott these companies."
Yeah, that piratebay sure is some strong "boycotting". Let's copy some CD's for our friends in protest.
"There is no other way to set things right."
Don't do the crime if you don't want to do the time.
"We need to talk with our money."
"I'm not hurting anyone because I never would have bought it anyway".
That is not flamebait. It is good security to ask before executing unknown code.
A company like Sony can find that much money under their sofa cushions.
You call this a sig?
I think John Cleese said it best from his 1980's UK ad campaign for Sony:
We like to think we give people what they want, because it comes from those awfully nice Sony people."
"I like to skate on the other side of the ice"
Um, iTunes on the PC has a bad reputation for causing problems. iTunes installs a service that constantly watches the CDRom and USB ports regardless of whether iTunes is actually running. These drivers and hooks are left behind when you uninstall iTunes. Having those drivers still in there makes it impossible to do a repair or in-place upgrade from the CD if Windows gets corrupt. I spent a few hours trying to recover a computer last week and finally had to do some registry crawling to get the remaining iTunes drivers and registry changes out of there.
Source:
As part of coparent Sony's earnings report today, Sony BMG reported net income of $178 million on sales of $1.49 billion for the three months ended December 31. As was the case with Sony, the label giant's performance was bolstered by increased cost savings and reduced restructuring charges.
Latewire
I would pretty much bet that they'll charge this whole thing against the cd sales of the artists that had this crap on their cds, effectively costing sony nothing. Remember that this is a company that still makes artists pay for "breakage" on iTunes sales.
Do you have ESP?
The article Slashdoe links to (not to mention the summary) mentions both MediaMax and XCP.
Sony needed to be smacked a lot harder than this. They probably make that much by selling a couple Britney clone CDs.
Oh You POS
Read the summary. It explicitly mentions MediaMax copy protection.
... of Sony's bullshit. Don't buy their crap to begin with. If it has the Sony name anywhere on the product then chances are you're getting less and paying more. This goes along with all of their proprietary bullshit that they try to force on consumers. They keep failing, but they keep trying. PASS.
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.
There is a fine line between recklessness and courage... -- Paul McCartney
this changes nothing. i'm still never going to purchase another cd from a sony artist. i'll gladly download one, however. gg, sony.
People should start referring to DRM this way, it's not "Rights" management. DRM = Digital Restrictions Management
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?
A papercut? That is something that draws blood, causes annoyance, and some pain and discomfort. This judgement is more akin to a slight itch on your arm you scratch subconsciously...
Love many, trust a few, do harm to none.
https://secureweb.rustconsulting.com/sonybmgcdtech settlement/Instructions.aspx
What is this crap? They only offer you downloads of the music you bought? I wish Sony had a mascot, so I could throat punch him...
So that's California and Texas. Are there any other States/countries/etc that are still bringing about charges/damages against Sony?
"Heck, it might be fun to figure out how/where to get the form, what needs to appear on it and get as many people as possible to send one in. Sort of 'slashdot' the system."
Here you go.
Commodore64_love: I don't comprehend people who're so frightened of death that they'll bankrupt themselves to stay alive
Seems most comments here, are anti-DRM, rather than the rootkit aspect of it.
Sony, as are any other company entitled to protect their property.
How many people are sueing Symantec for their security holes than let malware onto peoples systems?
I stand corrected. My fault entirely, didn't realize there was any complaint except for the XCP.
I agree that the settlement is complete bs in terms of figures. However, don't forget that Sony and other record labels are more cautious about forcing DRM down consumer's throats, and I think it's likely that this rootkit has a lot to do with it. If this ruling means that Amazon can start selling DRM free music under a subscription model (and probably iTunes as well - who knows, Apple might even provide a legal de-DRM tool for existing music you bought), then I think the fact that 'we won the DRM war' should be seen as a good settlement as well.
But I guess we'll have to wait and see what the labels decide.
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.
The average individual law suit was for $2000 or so. You're telling me most people (who own computers and presumably have broadband access) make less than $2000/quarter ($8000/year)?
People seem to think that corporations are evil, faceless, and have infinite amounts of money.
When a corporation is sued for a large sum of money, people lose jobs and it's almost never the ones who deserve it.
If you were to take $200 million from Sony BMG, which has been seeing declining sales almost constant since 1998 or so, you'd be putting hundreds of people out of work.
As another poster said, the people in the company who were responsible for the rootkit have probably either been fired, disciplined, embarrassed, or penalized in some other way. At any rate, Sony wont be doing it again.
As for the consumer, getting up to $180 for a computer virus is a pretty good deal. It may not "punish" them in the way us bloodthirsty Americans would want to see, but makes up for what they did wrong. When all is said and done, this really was just an inconvenience.
Latewire
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?
Perhaps the laws against individuals are too strict, rather than the laws against corporations being too light.
Oops, we already know that to be true.
Up to $180 per computer affected is reasonable, makes up for the damage they've done, and makes sure they'll never do it again. That IS justice.
Latewire
For installing a virus on millions of PCs, they receive a fine which amounts to roughly $1 per offense or less?
Incredible.
Enact your own vengeance by enforcing a personal boycott of Sony. Nothing they make is unique, so buy from elsewhere.
If you go to Sony's headquarters in New York City, they spend more than $1.5 million decorating the place for the Christmas holidays. No. I'm not making this up. Somebody who lives/works in Manhattan should walk by and confirm what I'm saying.
I don't know what type of "damage" could have been done to these machines. I doubt any hardware was destroyed, and software is simply able to be reinstalled. I think (IMO) that this isn't for "damage", it should be for inconvenience.
That being said, can I just get a refund for the CD? It sucked.
Starmen.net
thats a billionare donating only 1.5 million every 5 years for charity
I think you misspelled politician. Sony lobbied politicians to the tune of 1.235 million dollars last year (2005). Politicians and judges aren't going to protect you. There is no justice in a totally corrupt system like America's system of "democracy."
Your forgetting the difference between profits and income. This isn't anywhere near 1/4 of Sony's income for the year. And yes, most of those sued probably make less than $8K in profits each year (that is, the leftover after all expenses are paid). Especially considering that the US currently has a negative savings rate meaning we're (on average) spending more than we're making.
Full-Featured GPL Web Hosting Control Panel
Has there ever been a class action lawsuit where the company didn't get off easy, the consumers got anything more than a token kickback and the lawyers didn't get rich?
I suppose this result is marginally better than most because in a large number of the class action lawsuits the individuals only get coupons or something lame.
However, $1.5 million is nothing for a company as large as Sony. According to the article each state involved gets $750,000. However, the article also says that in California 450,000 of these disks were sold. So Sony is giving back less than $2 per disk -- they made more than that on each disk! So they still made money on this deal.
http://www.popularculturegaming.com -- my blog about the culture of videogame players
1.5 Million? What? That doesn't do anything ... ANYTHING at all as far as making up for what they did. Sony should be paying out a hundred million or more to each suing state and some execs should go to prison. This will only promote further, even more horrible acts of computer crimes by large companies.
How exactly is a fine that is likely to total less than $2million after all is said and done a deterrant to a company that is worth 43 Billion dollars? To put it into context this would be like a normal person being fined somewhere between $2 and $6. It's not even a cost of doing business, it's loose change, and a tax deduction at that.
Funny how for most people fines for illegal activities come in the form of a large percentage of the person's net value, but when you start talking about corporations less than 1/10 of 1% of book value is seen as a heafty fine.
Pleaaaassee...
So if I infect willingly and purposefully computers and gather information about my customers, install backdoors so I can come back (should the need arise) and so on, I'm gonna have to pay 1.5m bucks and that's it? The data alone is worth a magnitude more!
I'm surely working for the wrong side of the biz... eh? What do you mean, officer, jail time?
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Here's the thing. Everyone is saying that they need to go to jail.
But this was a civil trial. They broke the law, yes, but it was civil law that they broke. It was a class action suit for financial damages.
The reason they're not facing jail time is because no one went to the local constabulary and said: "I would like to press charges - my computer was hacked, this is how they did it, this is where they admitted to it."
Then you might see a criminal trial.
I used to work for NetQoS. I no longer do, but want to keep the excellent karma attached to this account.
$200M would be over 112% of Sony BMG's 4th quarter 2005 profits.
And? If the company is allowed to profit by damaging other people's computers, then it will continue to do so. By removing any profit from this particular misadventure, it will certainly cause them to think twice before trying it again, knowing that it would lose money.
Ideally, someone would sit down with a calculator and tally up all of the revenue from sales of these CDs, and force Sony to return that money. That would guarantee that the enterprise was a money-loser while still ensuring that damages are proportionate to the damage done.
If I have been able to see further than others, it is because I bought a pair of binoculars.
"Anti-piracy" software? Preventing piracy might have been someone's original motivation for the attack, but the actual behavior of the software that Sony shipped, had little to do with piracy. Did this rootkit modify the host's "copy" command or ftp-uploading code, or something like that?
if you have feedback for the Texas AG, he can be emailed at greg.abbott@oag.state.tx.us
I don't think the punishment was harsh enough, but you have to wonder why there were only 2 states with the balls to punish these guys.
We all keep hearing these stories where some punk kid hacked a web server and the company that owned it then spend hundreds of thousands of dollars investigating and fixing their security problems. Is Sony now liable for similar damages against businesses that were infected by Sony's rootkit? A $1.5 million dollar settlement sounds like it's orders of magnitude too low considering the potential cost of cleanup.
IANAL, but I'd guess that if you don't accept the settlement from the class-action lawsuit, then you still retain the right to sue in civil court. Don't you typically have to sign an agreement waiving your right to sue for damages when you accept settlements like this?
So does this give me any kind of legal precedence against the Macrovision Corporation for installing their unsolicited SafeDisc copy protection driver to my PC? It is suggested there may be a local local privilege-escalation vulnerability similar to the kind that Microsoft has patched in their own services: http://www.securityfocus.com/bid/17070/info/
c es\Secdrv
O yes, if you've Installed any games or programs using SafeDisc *and there are lots of them* it is there.
HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Servi
I wouldn't be at all surprised if Sony's own SecuROM protection has something similar.