Consumer Counterattack

For the last several months, the major record labels have been ramping up what some have viewed as a stealth assault on their customers by increasingly deploying technology that restricts the use of audio CDs (see previous). While an increasing number of music fans have been crying foul, one consumer has decided to fight back in court.

Last week, Karen DeLise of California sued Fahrenheit Entertainment and its label, Music City Records, on behalf of the General Public of the State of California, "to enjoin them from selling music compact discs that have been designed, programmed, and implemented to defeat the rights of consumers [and] that include misleading advertising, defective notices, and invasions of privacy."

The suit alleges that Fahrenheit and Music City never disclosed on the shrink-wrap of certain "impaired" CDs that consumers couldn't listen to music on their computers anonymously. According to the suit, if left unchecked, "this will be the start of an era where consumers will be coerced to give up their privacy to listen to music on their computers."

The lawsuit, filed in California Superior Court in Marin County as DeLise v. Fahrenheit Entertainment, Inc. et al, alleges that Fahrenheit failed to disclose that "unlike millions of music CDs sold before it," the company's disc entitled Charley Pride—A Tribute to Jim Reeves (see previous) will not work on the standard audio CD players found on millions of personal computers, and that electronic music files made available for download after the purchase of the Pride CD are proprietary in nature and will not work on portable MP3 players.

More significantly, the suit contends that the consumer's privacy is compromised by the CD security system. The suit alleges that the CD includes a proprietary electronic music scheme facilitated by SunnComm (also named in the suit) technology that "tracks, stores, and disseminates specific consumer personal identifying information, listening data, and downloading habits to entities beyond the control of the consumer." The suit also points out that there is no practical way to opt out of the data collection or destroy the data once it is collected.

Ira Rothken, an attorney from the law firm which is representing DeLise, says that "Fahrenheit, in our view, has an obligation to the General Public to truthfully and adequately inform them, before the CD sale is made, about what they are taking from them as a condition of playing the music CD on a family computer, namely personal, private information. Consumers have a right to privacy and to be free from false and misleading advertising, protected by the laws of the State of California. It is our view that Fahrenheit and Music City do not disclose the privacy intrusion and other limitations with specificity on the CD container, since it would likely hurt sales. If the defendants want to implement Digital Rights Management technology they have to do so responsibly, so the consumer can make an informed decision about buying the burdened CD."

Fahrenheit points out that the back of the Pride CD does include a disclaimer stating, "This audio CD is protected by SunnComm MediaCloQ Ver 1.0. It is designed to play in standard audio CD players only and is not intended for use in DVD players. Licensed copies of all music on this CD are available for downloading. Simply insert CD into your computer to begin." But Rothken says that the wording is not specific enough in stating how the disc is restricted for use in a computer or MP3 playback device.

Consequently, Rothken says, his firm is "requesting an injunction against Fahrenheit and SunnComm, stopping them from tracking consumer habits and requiring the defendants to provide adequate notice of the privacy intrusions and CD deficiencies."