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Sony BMG has put the biggest of its legal challenges behind it.

The music company has settled a series of class-action lawsuits stemming from its use of software that was intended to prevent illegal copying of its CDs but left customers’ computers vulnerable to viruses and other attacks.

Ending a year in which it has been shaken by bad publicity surrounding the digital rights management software, the music company offered free music downloads and agreed to stop making CDs with the offending XCP or MediaMax software.

The company also agreed to bring in an independent auditor to confirm to customers it has not and will not use their personal data.

Sony BMG produced 4.7m CDs containing the software, of which nearly 3m were sold. It will pay an undisclosed amount for the recall of affected discs, and will also bear the cost of compensating members of the class-action suits.

Consumers who bought any of the 52 titles with XCP software will receive replacement copies and the choice of two compensation packages: a cash payment of $7.50 and one free album download; or three free album downloads. Users of the MediaMax software will receive a free download.

Lawyers for the plaintiffs welcomed the settlement, which the Electronic Frontier Foundation, a digital free-speech advocacy group, said would “provide significant benefits for consumers who bought the flawed CDs”.

The copy protection problem emerged after a security researcher revealed on his blog that a Sony BMG CD had installed a “rootkit” – tools used by hackers to disguise their presence – on his computer.

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