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Sony BMG Music Entertainment’s compact discs, which feature artists such as Ray Charles, Neil Diamond and others, have hit a sour note with consumers, and Texas Attorney General Greg Abbott has sued the company for allegedly implanting illegal “spyware” in its CDs. In the first enforcement action in the nation against New York City-based Sony BMG, Abbott filed suit under the state’s new Consumer Protection Against Computer Spyware Act, Texas Business & Commerce Code �48.001. “Today is a day the long arm of the law catches up with new technology that turns out to be bad,” Abbott told reporters at a Monday news conference held shortly after he filed the suit in Austin’s 126th District Court. According to Abbott’s original petition in State v. Sony BMG Music Entertainment, the company’s CDs utilize XCP technology that is designed to prevent CD pirating. But the company makes no disclosure on its packaging that anything will be installed on the consumer’s computer before the consumer can listen to the music, Abbott alleges in the petition. As noted in the petition, if a consumer clicks “agree” on the end-user license agreement that pops up when one of the company’s discs is placed in a computer, Sony BMG’s media player will load to allow the consumer to listen to the CD. Abbott alleges in the petition that, unbeknownst to the consumer, Sony BMG also installs a secret file on the computer that the consumer can’t detect or remove. “Sony BMG does not disclose the fact that its technology includes this cloaking component to consumers on either the CD or in its licensing agreement,” Abbott alleges in the petition. At the news conference, Abbott alleged that the technology can damage the consumer’s computer by making it vulnerable to viruses or worms. The technology also could expose the consumer to possible identity theft, he alleged. Abbott said his office also is investigating the possibility that the Sony BMG technology is the equivalent of a “Peeping Tom,” allowing the company to track the computer sites that consumers visit and their buying habits. In a Nov. 18 release on its Web site, Sony BMG announced that it is working with retailers to recall CDs containing the XCP content protection software. The company has ceased manufacturing the CDs with the XCP software, according to the announcement. But Abbott told reporters that investigators from his office still were able to buy CDs with the software on Nov. 20. John McKay, with Sony BMG corporate communications, did not immediately return a telephone call seeking comment. Abbott said the anti-spyware law, which took effect on Sept. 1, provides for damages of up to $100,000 per violation. If the state is awarded damages under the new law, the money goes into the state’s general revenue fund, says Paco Felici, a spokesman for the Texas Office of the Attorney General. Abbott told reporters that the new law does not authorize suits by private individuals who contend that spyware has damaged their computers. Tom Kelley, another spokesman for the AG’s office, says the attorney general is considering amending the suit to add allegations under the Texas Deceptive Trade Practices Act, thereby making it possible to seek restitution for consumers. Electronic Frontier Foundation said Sony BMG needs to further publicize the recall and compensate consumers for costs associated with removing the software, an onerous process. The digital rights group was filing a lawsuit in California Superior Court in Los Angeles. Associated Press reports contributed to this story.

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