The Electronic Frontier Foundation (EFF) filed the suit last year after researchers revealed Sony was using rootkit-like technology on CDs that installed itself onto PCs without the user being notified.
Sony customers will receive new CDs - without technology from First4Internet or SunnComm that was used to track the listening habits of customers. Sony last year defended its right to use such applications to prevent piracy among its customers before ultimately apologizing.
Affected customers can also download a patch to remove First4Internet’s XCP or SunnComm’s MediaMax code from their PCs. Sony has also agreed to distribute free music downloads, according to numerous media reports.
"This settlement gets music fans what they thought they were buying in the first place: music that will play on all their electronic devices without installing sneaky software," said Cindy Cohn, EFF legal director.
On a website set up to inform customers of their rights, Sony told affected CD users that they must remove XCP and MediaMax from their PCs as part of the claim process.
The entertainment giant also told PC users that removal would make their computing safer.
"If you have played a CD on your computer that contains either XCP or MediaMax 5.0 content protection software, you should update or uninstall the software to reduce your risk of security vulnerabilities," the statement said.
Claim forms are due by Dec. 31, according to Sony.
The EFF sued Sony on behalf of customers in November, as did Texas Attorney General Greg Abbott, who claimed Sony violated the state’s recently passed anti-spyware statutes.