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The settlement requires Sony BMG, a joint venture of Sony Corp and Germany's Bertelsmann AG to make further disclosures, to allow consumers to exchange the CDs at issue and reimburse consumers for up to $150 to repair any damage to their computers, the FTC said.

'Consumers' computers belong to them, and companies must adequately disclose unexpected limitations on the customary use of their products so consumers can make informed decisions regarding whether to purchase and install that content,'

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FTC Chairman Deborah Majoras said in a statement.

The FTC said Sony BMG violated the law by embedding some music CDs with software that installed itself on consumers' computers without their consent and restricted the number of times the audio files could be copied. It also was used to help send them marketing messages, the FTC said.

The software was 'unreasonably difficult to uninstall' and created security vulnerabilities that could allow hackers and other third parties to gain access to consumers' computers, the FTC said.

The software at issue was included on millions of Sony BMG CDs sold in 2005, the FTC said. The agency charged that it was deceptive because Sony BMG failed to disclose adequately that software would be installed.

Sony BMG issued a statement saying, 'We are pleased to have reached this agreement with the Federal Trade Commission.' The company declined to comment further.

Last month, Sony BMG reached a nearly identical settlement with 41 states and the District of Columbia. The company no longer includes the software on its CDs.