Sony BMG Music Entertainment will pay $1.5 million, and kick in thousands more in customer refunds, to settle lawsuits brought by California and Texas over music CDs that installed a hidden anti-piracy program on consumers computers without consumer’s knowledge.

The settlements, announced Tuesday, cover lawsuits over CDs loaded with one of two types of copy-protection software — known as MediaMax or XCP.

Under the terms of the separate settlements, each state will receive $750,000 in civil penalties and costs.

In addition, Sony BMG agreed to reimburse consumers whose computers were damaged while trying to uninstall the XCP software. Customers in both states can file a claim with Sony BMG to receive between $25 to $175 in refunds.

The company had previously settled a class-action case over the episode.

“Companies that want to load their CDs with software that limits the ability to copy music should fully inform consumers about it, not hide it, and make sure it doesnt inflict security vulnerabilities on computers,” California Attorney General Bill Lockyer said in a statement.

via BusinessWeek