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Under the terms of the proposed settlement, which will have to be approved by a judge, the record company will compensate anyone who purchased a CD that included either XCP or MediaMax DRM and will provide tools for removing the software from PCs. It will also recall all XCP CDs, having already recalled MediaMax discs, and has committed to limiting its use of copy protection measures in the future. This includes a promise not to use XCP or MediaMax nor any other system that installs software on a PC without the user's consent. Given that this is almost essential for a DRM system to work, the agreement could

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put an end to the practice for good.

Two compensation options will be given, depending on which DRM system has been used on the CD: $7.50 plus one free album download, or three free album downloads. Downloads will be available from several stores including iTunes, which will please those who bought an affected CD only to find that they could not copy it to an iPod. The company already has a programme for replacing protected discs with clean versions.

The settlement applies only to US residents and does not apply to a separate lawsuit filed in Texas. Nor does it affect any plans that Sony BMG or any of the other major labels may have to introduce similar DRM systems in Europe, although hopefully it will make them reconsider.

Sony BMG declined to comment.

Sony's problems started when computer programmer Mark Russinovich discovered that a protected CD had installed hidden rootkit software on his PC that could opened a significant security hole. The problems soon became a PR disaster after software 'fixes' failed to remove the rootkit and Sony made only a half-hearted attempt to recall and replace the discs. However this proposed settlement appears to show that Sony BMG has made a welcome volte-face.