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Sony BMG has agreed to settle Canadian class action lawsuits relating to its use of restrictive contractual terms and DRM technologies on music CDs.

 

If approved by the courts following hearings in late September, the Canadian settlement will resolve disputes in Québec, British Columbia and Ontario. The structure of the agreement mirrors the one reached in the United States earlier this year, and the terms are generally similar.

 

People who purchased CDs containing certain digital rights management systems will be entitled to various forms of compensation, depending on the type of software on the CD. Purchasers of "XCP" CDs will receive a DRM-free replacement disc and MP3 versions of the tracks, as well as a choice between either a cheque for C$8.40 (American purchasers got US$7.50) and a free album download, or 3 free album downloads. "MediaMax 3.0" purchasers get only a free MP3 version of the album they had bought, while "MediaMax 5.0" purchasers get the MP3s plus another free album download.

 

Sony BMG won't manufacture CDs with XCP or MediaMax in Canada, and it won't distribute any more XCP CDs. In the future, if Sony BMG uses a DRM system that hasn't been reviewed in accordance with the U.S. settlement, it has to notify Canadian courts. It also waived some of the EULA provisions. An independent auditor has verified Sony BMG's affirmation that it hasn't collected personally identifiable information without consent, and Sony BMG has agreed to destroy every 10 days IP addresses logged from hits to its servers.

 

You can find more background information and legal analysis in my recent article, "How Restrictive Terms and Technologies Backfired on Sony BMG Music." Further details and forms related to the settlement are available here.