Sony BMG Faces Lawsuits In Canada Over Anti-Piracy Software

Personal lawsuit also filed by Mississippi law student.

On the eve of the tentative settlement of more than 15 class-action lawsuits in the United States over anti-piracy software embedded on Sony BMG CDs, the company is now facing lawsuits over the same issue in Canada.

In addition to two class-action suits brought by Merchant Law Firm in Calgary, Alberta, a law student in Mississippi has filed a personal lawsuit against the company, claming that its XCP anti-piracy software seriously damaged his computer and that the remedies offered by the company did not adequately resolve the problem.

Mark Lyon, who has set up the Web site as a clearinghouse for information about the legal actions that have arisen from the XCP debacle, said he filed a personal suit on Thursday in the County Court of Hinds County, Mississippi, instead of joining the multiple class-action suits across the country because he didn’t think Sony’s offer was adequate.

The issues over the XCP software arose in October when a programmer discovered that a Sony CD had installed copy-protection software that was hidden on his computer’s hard drive. He soon found that the software — embedded on more than 50 titles — could be exploited by viruses, that removing it manually could damage computers and that patches provided by Sony sometimes did more harm than good. A series of class-action suits resulted in the United States.

Lyon said he sent a letter two months ago to Sony CEO Andrew Lack asking for help in removing the XCP software without having to download any additional software, and asking for a replacement for his Our Lady Peace CD and compensation for his time and the damage done to his computer. A month later he received a letter from someone at Sony who suggested he download the uninstaller the company had offered to users.

“I was one of the first people to use the uninstaller and it opened up my computer to even more vulnerabilities,” said Lyon, who, like many consumers, learned from media reports that his Sony BMG CD had secretly installed files on his computer hard drive to thwart piracy, but had also opened up his computer to potentially malicious behavior by hackers.

“I don’t trust Sony’s software now to do what they said before that it would do,” Lyon said. “When I asked for instructions on how to uninstall the program without using or buying another program by Sony or someone else to repair my computer to how it was before, they patently ignored it and my only choice was to file suit.”

Lyon said his suit is based on grounds of invasion of privacy, fraud based on Sony’s statements that XCP doesn’t report back to their servers and doesn’t harm computers, and negligence. The most damages Lyon said he could expect from his suit would be around $200,000.

U.S. District Judge Naomi Reice Buchwald on Friday (January 6) tentatively approved a settlement proposed by Sony to end 15 or more class-action suits in the United States. The company will offer $7.50 and a free album download to consumers affected by the XCP software, or three free downloads in place of the money.

The company has also pledged to stop manufacturing CDs with XCP and another piece of anti-piracy software called MediaMax and to clearly label any anti-piracy measures it uses in the future. The settlement does not cover a suit by the Texas Attorney General alleging violations of that state’s anti-spyware law.

Canada’s Merchant Law Group filed suit on Wednesday in British Columbia and Ontario. “We don’t think Sony itself is spying on people, but that the program creates a compromise in the security of a Windows program that could be exploited by a third party,” said Evatt Merchant.

“We’re trying to put the Canadian consumer on equal footing with American consumers to ensure that Sony BMG doesn’t think of this as a situation they only have to deal with in the U.S.” The Merchant suit alleges that XCP compromises the security of a user’s computer, contains undisclosed spyware that’s harmful to computers and creates privacy risks.

Merchant filed the suit on behalf of five clients but said there are more than 120,000 XCP-affected CDs in Canada that could potentially open the door to hundreds or thousands more joining the suit. A Sony BMG spokesperson had no comment at press time.