DRM to be labeled on Sony CDs



FEB. 2 | IT APPEARS WE now have a labeling requirement in this countryregarding the use of digital rights management.

It’s spelled out pretty plainly in the consent decree and order agreed to Jan. 29 by Sony BMG Music to settle charges with the Federal Trade Commission stemming from last year’s DRM “root-kit” fiasco.

According to an FTC press release regarding the settlement, the consent order requires “clear and prominent disclosure on the packaging of Sony BMG’s future CDs of any limits on copyright or restrictions on the use of playback devices.”

In addition, it bars the company from installing any software on the consumer’s PC without first gaining the express permission of the user.

The settlement is a result of a complaint brought by the FTC against Sony BMG after it was discovered that several of the label’s CD releases included copy-protection software called XCP that secretly installed itself on consumers’ PCs and then used cloaking technology to hide its presence and make it difficult for the user to remove.

As part of the settlement, Sony BMG must reimburse consumers who purchased the CDs up to $150 to cover damages to their PCs caused by users’ efforts to remove the software.

Apart from limiting the number of copies consumers could make of the CDs, XCP secretly opened a hole in the computer’s operating system that the label used to monitor the consumer’s use of the CD, but which also exposed the computer to malicious software and other security threats.

“Consumers’ computers belong to them, and companies must adequately disclose unexpected limitations on the customary use of their products so consumers can make informed decisions regarding whether to purchase and install that content,” FTC chairman Deborah Platt Majoras said.

Although the specific terms of the settlement legally apply only to Sony BMG for now, the broad wording of the original complaint and the consent order hold clear implications for other content providers.

The commission makes it clear that it regards Sony BMG’s non-disclosure of limits on the use of digital content to be an “unfair and deceptive” practice, so it won’t be long before other non-disclosed uses of DRM are challenged on the same grounds.

(Prediction: the phrase “customary use” will be hotly contested in future cases.)

Several cases in a number of state courts, in fact, have already pointed toward a more general requirement. With the FTC now weighing in, we have a clear predicate for an eventual federal requirement that all limitations on the use of digital content be “prominently” and “specifically” disclosed to the consumer.

PERHAPS THE MOST interesting question raised by the Sony BMG settlement, however, is whether the consent order’s focus on particular DRM formats is more broadly applied.

According to the order, Sony BMG’s CD packaging must prominently disclose that the CD’s DRM software, “(1) will install on consumers’ computers, if that is the case; (2) will limit the number of physical copies that can be made from the product, if that is the case, and the number of permitted copies; and (3) allows the direct transfer of the product’s audio files or other digital content only to playback devices that use secure Windows formats or the Sony ATRAC format, if that is the case [emphasis added].”

One of the original complaints that led to the FTC’s involvement in the case was Sony’s failure to disclose that its DRM software did not allow users to transfer the CDs to their iPods. Instead, they could only be transferred to portable devices running Windows DRM or Sony’s proprietary ATRAC format.

That could hold implications for the inter-industry discussions currently underway within the AACS Licensing Authority and the DVD Copy Control Assn., which licenses CSS, over managed copy.

In both cases, it’s assumed the licensing authorities (and as a practical matter, the studios) will determine which devices and DRM schemes will be permitted to host approved copies ripped from standard or high-def DVDs. And in both cases, it’s assumed that the studios will choose no more than two approved managed-copy DRM schemes, one of which is almost certain to be a secure Windows format.

You have to wonder, though, how popular a feature managed copy is likely to be with consumers if it means the packaging is festooned with a long list of formats, operating systems and devices that you can’t use it with.

Along with the list of all the other things you can’t do with the disc you just bought.


Labeling will help people realize that the stuff that they all of a sudden can’t do with a CD they just bought, are down to the manufacture and their use of DRM. Hopefully they will vote against it by spending their money elsewhere.


…and bug the appropriate legislators en masse and ad nauseum, so the consumer truly has his/her fair use rights restored–with the final result killing DRM. :wink:


can someone summerize this? all those big words confuse me LOL.


^ To Lieutenant
The Federal Trade Commission is making Sony BMG disclose exactly what kinds of digital rights management controls they are putting on their future cds. It has to be plainly spelled out on the packaging. This order only applies to Sony at the moment, but it may be applied to other makers of digital content, and may affect dvds and high definition formats as well. One of the most interesting aspects is how this will influence “managed copies” and shifting music or videos to other formats.
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