Has Sony surrendered?

The firestorm surrounding Sony-BMG Entertainment may finally be near its end, as the recording industry giant has agreed to settle lawsuits resulting from its inclusion of spyware-like technology on CDs.

Sony will give customers who purchased an affected disc either cash, a replacement CD or downloadable music, numerous media reported this week. The settlement is in response to a handful of lawsuits filed against the music giant late last year.

A media firestorm erupted in November over the data management applications, forcing Sony recalled CDs containing Extended Copyright Protection (XCP) technology, made by London-based First4Internet. The company recently said it will also stop making CDs containing the similar MediaMax, created by Phoenix-based SunnComm.

Both MediaMax and XCP have been found to install software on PCs without warning the user.

Sony's legal troubles worsened in the waning days of 2005, when Texas expanded its lawsuit against the recording company to seek damages caused by MediaMax as well as XCP. State Attorney General Greg Abbott had initially sued Sony in November for its use of XCP, claiming it violated the state's recently enacted anti-spyware law. Private attorneys had also sued Sony on behalf of consumers.

The Electronic Frontier Foundation and Sony jointly announced a software update for MediaMax earlier this month.

A media uproar had forced Sony to offer exchanges for CDs containing XCP technology after Windows security expert Mark Russinovich first disclosed the rootkit technology on his website in late October. Within weeks, new trojans took advantage of the rootkit technology and bloggers disclosed that Sony's uninstall for the XCP also made PCs vulnerable to malicious code.

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