Sony Settles Over CD Anti-Piracy Flaw

Montreal riot police guard the back entrance of the headquarters of the Quebec Provincial police as protesters march by during the nightly protest march against tuition fee hikes and new legislation controlling protests in Montreal on Monday, May 21, 2012. (AP Photo/The Canadian Press, Peter McCabe) / Peter Mccabe

A judge approved a settlement of lawsuits against the world's second-largest music label that gives millions of consumers free song downloads to compensate them for flawed anti-piracy software on compact discs.

With the settlement, the label, Sony BMG Music Entertainment, will stop manufacturing CD software that can leave computers vulnerable to hackers.

U.S. District Judge Naomi Reice Buchwald on Monday gave the final approval at a hearing in federal court in Manhattan. The deal was tentatively approved in January.

The settlement pertained to lawsuits alleging that the vulnerabilities were created by MediaMax software or XCP software.

According to terms of the deal, Sony BMG will let consumers who bought the CDs receive replacement discs without the anti-piracy technologies and will let them choose one of two incentive packages that provide cash or free music downloads.

MediaMax was loaded on 27 Sony BMG titles, including Alicia Keys' "Unplugged" and Cassidy's "I'm a Hustla." Lawyers have said as many as 20 million CDs containing MediaMax were sold.

The label recalled the discs with XCP in November 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.

Sony BMG, a joint venture of Japan's Sony Corp. and Germany's Bertelsmann AG, has said it did not use the software programs to collect or retain personal data about the consumers without their consent.

In a statement Monday, Sony BMG said it was "pleased that the court today granted final approval of the class action settlement of the consolidated cases concerning XCP and MediaMax."