The company first announced settlements with California and Texas December 19th totaling $1.5 million, followed by another agreement two days later with 39 states and the District for an additional $4.25 million.

Sony BMG also said it will no longer distribute any CDs containing copy- protection software that hinders computer users from easily locating it or removing it from the PCs. One of two programs, MediaMax and XCP, was loaded by the company onto CDs covering 52 titles starting in 2003.

Both programs not only restricted the number of copies of a disc that a user could make but caused problems for many when they played the CDs on their computers.

If that wasn’t headache enough, the XCP software hid itself from computer users attempting to remove it from their hard drives and opened security holes on PCs running Microsoft XP operating systems. Attempts to remove the software in some cases disabled CD-ROM drives.Massachusetts Attorney General Tom Reilly’s office took the lead in brokering the 39-state agreement, which was filed December 21st in Suffolk County Superior Court in Boston.

“If companies want to use technology to protect their interests, they need to be up front with consumers, and give consumers the opportunity to make informed choices about buying and using these products,” Reilly said in a statement.

Thirteen states that started the settlement process with Sony BMG will each receive $316,538, while the rest will get $5,000, Reilly’s office said.

New York-based Sony BMG said it was pleased to reach the agreement.

Word of Sony’s software problem spread October 31, 2005, when computer security researcher Mark Russinovich posted an item on his blog detailing how he had discovered a “rootkit” on his computer.

Rootkits are generally employed to hide files and programs, and are usually used in tandem with Internet worms and other nasty computer viruses.

Furthermore, rootkits can enable someone to take control of a machine without the owner’s permission. In short, a rootkit is malware – and some suggested Sony BMG was using the technology to spy on consumers.

Sony BMG recalled the discs with XCP in November 2005 and released a program to uninstall the software. It also released a software patch to fix the security glitch caused by the MediaMax 5.0 program.

Customers will be able to file a claim with Sony BMG to receive refunds of up to $175, but claims must include a description of how their computer was harmed and documentation of repair expenses. The refund policy will also apply to states that were not a party to the settlement.