updated 12/29/2005 5:43:02 PM ET 2005-12-29T22:43:02

A proposed settlement of lawsuits against Sony BMG Music Entertainment would let some consumers receive free music downloads to compensate them for Sony surreptitiously including spyware on millions of CDs, lawyers said Thursday.

Lawyers said the deal requires the world's second-largest music label to stop manufacturing compact discs with MediaMaz software or with extended copy protection or XCP software that could leave computers vulnerable to hackers.

The proposed settlement was submitted to U.S. District Court in Manhattan on Wednesday. A judge was expected to decide in January whether to tentatively approve it.

According to terms of the settlement, Sony BMG will let consumers who bought the CDs receive replacement discs without the anti-piracy technology and will let them choose one of two incentive packages.

The first package allows consumers to obtain a cash payment of $7.50 and a promotion code allowing them to download one additional album from a list of more than 200 titles.

The second package permits them to download three additional albums from the list. The court papers said Sony BMG would try to offer Apple Computer Inc.'s iTunes as one of the download services available to the consumers.

Those who purchased MediaMax CDs would receive additional compensation.

Elizabeth C. Pritzker, a lawyer for the consumers, said the settlement provides for the compensation to be paid out beginning as early as mid January, even before final approval of the deal is granted by the court.

Software intended to limit copies
Sony began including MediaMax on some of its discs in August 2003 and introduced XCP last January. Both software programs limited the number of copies of a disc that a user can make.

Beginning in November, more than 20 lawsuits were filed after a computer security research specialist a month earlier traced a hidden software program on his computer to an XCP disc he had purchased and installed, the settlement papers said.

According to the court papers, the software program made the user's computer more susceptible to unwanted intrusion from third parties and effectively disabled any firewall and anti-spyware protection programs previously installed on a computer.

Texas Attorney General Greg Abbott also had sued Sony.

Sony BMG did not immediately return a telephone message Thursday.

The company has said it has provided consumers with a one-click "uninstall" application that lets them remove MediaMax from their computers. MediaMax was loaded on 27 Sony BMG titles, including Alicia Keys' "Unplugged" and Cassidy's "I'm a Hustla."

Pritzker said as many as 20 million CDs containing MediaMax were sold.

The label recalled the discs with XCP in November and released a way to remove the files from users' computers. Some 4.7 million CDs on 52 Sony BMG titles had been made with the technology and 2.1 million had been sold.

Sony BMG is a joint venture of Sony Corp. and Bertelsmann AG.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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