[BC] Sony "Settlement" ... guess who wins?

[Reader]

Unsettled by the Sony Settlement

Friday, December 30, 2005
By Ed Foster

I suppose my expectations for the lawsuits against Sony BMG over its 
copy-protected CDs are just too high. After all, it's probably too 
much to hope for that a major international conglomerate would 
actually suffer any serious consequences just because it 
irresponsibly inflicted dangerous DRM and an outrageous EULA upon its 
customers. Perhaps the proposed settlement really is the best that 
could be expected, but there is something about it that bothers me.

Alex Eckelberry of Sunbelt Software has posted on his blog 
(http://sunbeltblog.blogspot.com/2005/12/exclusive-preliminary-settlement-for.html) 
a proposed settlement for a consolidated group of class actions 
brought against Sony in the U.S. District Court for Southern New 
York.  Reading through it, I could certainly see a number of things 
about the settlement that I liked, such as the incentive programs to 
encourage customers to disinfect their machines and a commitment on 
Sony's part to have its privacy practices monitored.  It was 
particularly amusing to see Sony agree to try to get iTunes as one of 
the download services customers could use to get bonus music, since 
Sony all along has been pointing fingers at Apple when customers 
complained (http://www.gripe2ed.com/scoop/story/2005/7/25/91659/2897) 
they couldn't move tunes to their iPods.

And at least the settlement doesn't ignore the EULAs that come with 
the CDs that have either the XCP or MediaMax DRM installed. Sony 
agrees that in the future it will not install DRM on a customer's 
computer before they get to see and agree to the disclosures about 
the DRM in the EULA. And one very good aspect of the settlement is 
that Sony waives its consequential damage liability limitation 
clauses for individual legal actions, meaning that those whose 
computers or networks were actually damaged by the DRM could bring 
individual actions seeking compensation.

Still, though, it was something about the way the settlement 
discusses the EULA provisions that was my biggest problem. This 
paragraph describing what Sony is agreeing to do might illustrate it best:

"Defendants have agreed to waive certain of their rights under the 
XCP and MediaMax EULAs. These waivers will allow consumers to remove 
the XCP and/or MediaMax software from their computers, listen to the 
audio files across all file formats and in all portable music 
players, and choose not to download future updates of the XCP or 
MediaMax software. Once these provisions are waived, consumers will 
not have to be in possession of the Sony BMG CD to hold a license for 
the audio files, will not be precluded from copying music files and 
other digital content on the CDs, will be allowed to resell the CDs, 
and will not lose their licenses for the software if they file for 
bankruptcy protection or are declared insolvent. Also, Defendants 
waive their rights to be indemnified by users of the XCP or MediaMax 
software for harm arising from their use of the software."

So Sony has waived all of the most obnoxious terms we previously saw 
in its EULA. Isn't that a good thing? Well, in a way, but think about 
what this is saying. The "rights" that Sony is being such a good 
sport to say it will not enforce in this instance include its right 
to take away a paid-for license because a customer is insolvent, the 
right to say which competitor's devices the audio files can be played 
on, and the right to have customers indemnify Sony for the harm Sony 
has caused them.

Call me a dreamer, but I had hoped one result of this litigation 
would be that no company has those kinds of  "rights" just because of 
a few terms in the sneakwrap fine print. Sure, it's swell that this 
settlement requires Sony, if its puts DRM on its CDs before 2008, to 
have a EULA that discloses everything the software does in plain 
English. But the settlement doesn't preclude Sony from using its EULA 
to once again claim the same rights as it did this time. In other 
words, Sony can basically do the same thing again - next time it just 
has to disclose what it's doing a little more clearly and completely 
in its EULA. And come 2008, Sony is free to revert to the old EULA 
or, for that matter, to go find a new rootkit to use on its CDs.

I'd say this settlement is a slap on the wrist for Sony, except that 
might be exaggerating the severity of the punishment it's receiving. 
Let's hope that other legal actions not covered by this settlement, 
such as the Texas Attorney General's investigation, go a little 
further in curtailing the reckless use of DRM and EULAs.  Is it too 
much to hope that, rather than  Sony being begged to waive some of 
the rights it thinks it can grant itself, there might be an 
acknowledgement that we customers have a few rights of our own?