Sony Settles Rootkit Case with California

California consumers affected by Sony BMG's decision to place rootkits on some of its music CDs will be compensated under a $750,000 settlement with Los Angeles County and the State of California.

The suit accused Sony of not properly notifying consumers about its actions, as well as creating a potential security hole for hackers to compromise affected consumer's computers. A similar settlement has been filed in the state of Texas, according to media reports.

About 12.6 million CDs are estimated to have shipped with rootkits installed during 2005. Of that total, approximately 930,000 were shipped to California. The program was stopped in November after Sony's program was exposed.

Lawyers for the state complimented Sony's quick response, and Sony said it was pleased to have reached an agreement with both states. Other settlements are likely with other states as well as the federal government.

Under the terms of the settlement, consumers will be eligible for compensation of up to $175 for those who can provide documented evidence that a Sony rootkit caused damage to their computers.

The $750,000 settlement will be used to pay court costs and penalities, California officials said.