Sony BMG Settles Suit Over CDs

The software also was stored in such a way that it could not be seen on the PC without taking special measures.

In a news conference Tuesday in Austin, Texas Attorney General Greg Abbot said the settlement sent a clear message.

"Texans deserve to be protected from harmful hidden software that threatens their privacy or the security of their computers," he said.

In a statement, Sony BMG said it was pleased to reach agreements with the two states.

Sony BMG began including MediaMax on some of its discs in August 2003 and introduced XCP in January 2005. Both programs limited the number of copies of a disc that a user can make.

But word began to spread on the Internet in late 2005 that the software on the CDs potentially could make computers vulnerable to hacking. Some suggested the company was using the technology to spy on consumers.

But the company maintained it did not use any of the software to collect personal data about the consumers without their consent _ an assertion backed up by an outside company commissioned by Sony BMG to audit its use of the copy-protection software.

Sony BMG ultimately recalled the discs with XCP in November 2005 and released a way to remove the files from users' computers. Some 4.7 million CDs on 52 Sony BMG titles had been made with the technology and 2.1 million had been sold.

Tuesday's settlements close out government probes into the matter by Texas and California. The company had previously settled a class-action case over the episode.

Sony BMG is a joint venture of Sony Corp. and Bertelsmann AG.

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On the Net:

Sony BMG information on settlement: http://www.sonybmgcdtechsettlement.com

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Associated Press Writer Liz Austin Peterson in Austin contributed to this report.