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Sony's CD Woes Grow With Texas Lawsuit

Posted on: Tuesday, 22 November 2005, 06:00 CST

By Jefferson Graham

The crisis at Sony BMG Entertainment worsened Monday when the Texas attorney general sued the record label, saying it violated the state's new anti-spyware law.

Also Monday, a consumer rights group filed a lawsuit against the No. 2 record label that also cites spyware concerns.

The lawsuits follow Sony's recall of nearly 5 million copy-protected CDs that contain a hidden file susceptible to viruses when played on a Windows-equipped computer. The company has asked retailers to remove more than 50 CD titles from store shelves and to replace them with non-copy-protected versions expected in stores by the end of the week.

Attorney General Greg Abbott says that despite the recall, his staff found CDs with XCP copy-protection created by British firm First4Internet on store shelves Monday. He estimates that as many as tens of thousands of Texas consumers have bought the CDs, and notes that Texas' spyware law calls for fines of $100,000 per violation. "Our message to Sony," he says: "Don't mess with Texas computers."

Sony said it is cooperating with Abbott's office. It says it does not comment on litigation.

Twelve states have enacted some form of anti-spyware legislation, and 28 states are considering bills, says the National Conference of State Legislatures.

Record labels say they're losing millions of dollars to CD burning and file-sharing. Sony tried to prevent that by issuing more than 50 CD titles from artists such as Neil Diamond and Celine Dion with the XCP software. When played on a Windows PC, the software controlled how many times the CD could be copied, and documented users' listening habits.

The Electronic Frontier Foundation (EFF) advocacy group's lawsuit is on behalf of three consumers. The lawsuit, which seeks class-action status, asks that Sony BMG repair any damage to consumers' PCs and reimburse them for any other costs. The lawsuit follows similar filings by private lawyers in New York and California.

EFF upped the ante by suing Sony both for the recalled XCP CDs and for CDs that use copy-protection from another firm, SunnComm. Those CDs are still on the market, and were found by Princeton researchers to also be potentially damaging. Like the XCP discs, software is installed on PCs to listen to the CD. But the uninstall program opens computers for attacks, the researchers say. SunnComm says it has posted a new uninstall program.

EFF estimates that as many as 20 million CDs with SunnComm copy protection have been sold. They include releases by such artists as Alicia Keys and Foo Fighters.

Inside Digital Media analyst Phil Leigh says Sony can expect more lawsuits. Leigh says it's ironic that labels tried to tackle piracy by suing file-sharing firms and users, and now one label is itself being sued.

(c) Copyright 2005 USA TODAY, a division of Gannett Co. Inc.

Source: USA TODAY

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