Sony BMG faces ongoing rootkit fallout

Sony BMG is making amends in California and Texas for secretly loading antipiracy software onto customers' computers. But the record label has a long way to go before putting the public relations nightmare behind it.

Sony BMG, which Sony operates jointly with Bertelsmann Music Group, agreed earlier this week to pay $1.5m in fines and pay customers in California and Texas whose computers suffered damage as a result of Sony's surreptitiously installed digital rights management (DRM) software.

Sony still has to contend with a consortium of 13 states, including Massachusetts, Nebraska and Florida, that are expected to look for a similar deal, according to Jeff McGrath, deputy district attorney for Los Angeles County, which took part in California's case against Sony. In addition, McGrath said an investigation launched earlier this year by the Federal Trade Commission looms.

The case has hounded Sony BMG and undermined the company's credibility, say Sony critics.

Cindy Cohn, legal director for the Electronic Frontier Foundation, said: "I think that there was a lot of record labels who got carried away with the idea of DRM. I don't think many of them stopped to think about the impact to their customers when they used DRM." The Electronic Frontier Foundation was one of the groups that filed a class-action suit against Sony last year on behalf of those affected by the antipiracy software.

McGrath, who is a member of the Los Angeles district attorney's high-tech crime unit, said he understands what Sony BMG was trying to do when it loaded the software.

"Much of what we do is go after pirates," McGrath said. "We are keenly aware of the individual's right to protect intellectual property. But if you're installing some kind of content protection and altering peoples' systems, you have to do it in a way that you're not damaging property. You also must be certain to fully disclose what you're doing."

The EFF's Cohn said that something positive may come from the fiasco: the case provides another reason for entertainment companies to abandon DRM.

She said that there are indications some entertainment companies may be ready to do just that. First, Sony hasn't placed any DRM on CDs since the the rootkit ordeal surfaced. The latest example came this week with reports that Amazon.com is preparing to launch a music download site featuring DRM-free songs.

"I think we're seeing a growing consensus that DRM isn't working," Cohn said.

Greg Sandoval writes for CNET News.com.