Sony BMG settles suit over CDs

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.

Not only did the program surreptitiously monitor users' behavior, but the method Sony BMG originally recommended for removing the software also damaged computers.

The settlements, announced Tuesday, cover lawsuits over CDs loaded with one of two types of copy-protection software -- known as MediaMax or XCP.

Under the terms of the separate settlements, each state will receive $750,000 in civil penalties and costs.

View: Business Week

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