3. The Settlement Falls Within The Range Of Possible Approval
As explained above, the proposed Settlement was reached only after protracted arm’slength negotiations between the parties and Plaintiffs’ Co-Lead Counsel’s thorough consideration of the advantages and disadvantages of continued litigation.
Plaintiffs’ Co-Lead Counsel believe this settlement achieves all of the objectives of the litigation, namely removing harmful XCP software from the market, stopping the continued release of MediaMax CDs, compensating people who unknowingly installed the software on their computers, fixing security vulnerabilities in XCP, MediaMax and SONY BMG’s future copy protection software, and ensuring that SONY BMG will provide complete and accurate disclosures in its EULAs for future content protection software. Plaintiffs’ Co-Lead Counsel, law firms with a great deal of experience in the prosecution and resolution of class actions and complex consumer litigation, have carefully evaluated the merits of this case and the proposed settlement. Even if the matter
were to proceed to trial, Plaintiffs’ Co-Lead Counsel acknowledge, based on past, real-world experience, that the apparent strength of a plaintiff’s case is no guarantee against a defense verdict. Furthermore, even if a judgment were obtained against Defendants at trial, the relief
might be no greater, and indeed might be less, than that provided by the proposed Settlement.
Under the Settlement, SONY BMG will be enjoined from using XCP and MediaMax software on audio CDs they manufacture. SONY BMG will implement several changes to its policies and procedures concerning content protection software and the EULAs associated with that software. These changes will ensure that the content protection software will not be installed without the user’s express consent, will be removable from the user’s computer, and will not render the user’s computers vulnerable to known security risks. In addition, the EULA’s will be written in plain English and will accurately describe the nature and function of the
content protection software.
The XCP Exchange Program is designed to ensure that the XCP CDs are removed from the market as soon as possible and to provide consumers with replacement CDs as well as downloadable music files. The MediaMax compensation will also provide benefits to consumers who unknowingly installed such software on their computers and exposed their systems to
security vulnerabilities. In addition, Defendants will continue to make available software utilities that will update and remove the XCP and MediaMax software from a user’s computer.
Defendants have committed that the do not and will not collect, aggregate or retain certain personal information on the computer users who listen to SONY BMG CDs without the
express consent of those users. Under the settlement, Defendants will be required to engage an independent expert to verify their practices with respect to collection of personal information.
Defendants have agreed to waive certain of their rights under the XCP and MediaMax EULAs. These waivers will allow consumers to remove the XCP and/or MediaMax software
from their computers, listen to the audio files across all file formats and in all portable music players, and choose not to download future updates of the XCP or MediaMax software. Once these provisions are waived, consumers will not have to be in possession of the SONY BMG CD to hold a license for the audio files, will not be precluded from copying music files and other digital content on the CDs, will be allowed to resell the CDs, and will not lose their licenses for the software if they file for bankruptcy protection or are declared insolvent. Also, Defendants
waive their rights to be indemnified by users of the XCP or MediaMax software for harm arising from their use of the software.
Finally, the settlement operates as a floor, not a ceiling, on benefits available to Settlement Class Members. Accordingly, if SONY BMG enters into other agreements with state and/or federal government authorities that provide additional benefits to certain consumers, SONY BMG will offer those same benefits to all Settlement Class Members. All of these measures are of particular value to Settlement Class Members. In light of the above considerations, the proposed settlement as a whole falls within the range of possible final approval. The Court should therefore grant preliminary approval of the settlement and direct that notice of it be given to the Settlement Class.
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