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updated 12/21/2006 1:48:57 PM ET 2006-12-21T18:48:57

Sony BMG Music Entertainment will pay $4.25 million as part of a settlement with 39 states to resolve investigations into problems caused by music CDs loaded with hidden anti-piracy software, state officials said Thursday.

Under the terms of the settlement, which also applies to the District of Columbia, the record company also agreed to reimburse consumers whose computers were damaged while trying to uninstall the anti-piracy software.

Customers will be able to file a claim with Sony BMG to receive refunds of up to $175.

Sony BMG also agreed not to distribute any compact discs loaded with copy-protection software that hinders computer users from easily locating it or removing it from their PCs.

The office of Massachusetts Attorney General Tom Reilly took the lead in brokering the multistate agreement. The settlement was expected to be filed later Thursday in Suffolk County Superior Court in Boston, Reilly's office said.

The settlements cover CDs loaded with one of two types of copy-protection software — known as MediaMax or XCP.

On Tuesday, Sony BMG reached separate settlement agreements with California and Texas.

In a statement Thursday, Sony BMG said it was pleased to reach the agreements.

The settlements close out the states' probes into the matter. The company had previously settled a class-action case over the episode.

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

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