Microsoft explores legal options against hacker

Sue Zeidler

LOS ANGELES: Microsoft Corp. said on Monday it was looking into its legal

options regarding an unidentified hacker who breached its anti-piracy technology

last week, enabling users to distribute songs without restrictions.

Microsoft group product manager Jonathan Usher told Reuters the damage to

Microsoft's overall digital rights management software would be slight, although

some music on the market had lost its protection.

"We learned about the hack on Friday and were on the phone with our

content partners right away," he said. "We have built in a means to

update the protections for cases such as this, and we're still implementing that

renewability."

The breach by the anonymous hacker named "Beale Screamer" stripped

the software of protections used by many content providers to protect music and

video online. The identity of the hacker who was distributing the software is

under investigation. "We're investigating our legal options," Usher

said. "Our real focus right now is working with our content

providers."

Microsoft has said its Windows Media has the broadest reach of any DRM

technology. More than 275 companies have licensed Windows Media DRM to create

secure distribution systems for audio and video content. DRM has become

increasingly important to Microsoft as it moves ahead in the battle over the

market for streaming media.

Last week's hack had compromised Windows Media audio version 7, which was

released about 18 months ago, Usher said. "The majority of the content is

protected with earlier versions of the DRM," he added. Usher said

Microsoft's content partners had been very understanding. "We have been

forthright that no technology and no DRM is 100 percent secure," he said,

adding that Microsoft has anticipated hacks such as this.

Users must first purchase a digital music file in order to exploit the

hacker's software, he said. If they have access to the Screamer software, they

could then strip off the locks on the purchased file and distribute the songs

without restrictions.

In July, Microsoft struck a deal to offer Pressplay, an Internet service

formed by recording giants Vivendi Universal and Sony Corp. on its MSN network,

using Windows Media format and the digital rights software. Pressplay is set to

launch later this fall.

"This doesn't change Microsoft's prospects or the recording labels'

positioning. This hack only affected one version of the Microsoft

software," said Aram Sinnreich, analyst with Jupiter Media Metrix.

"DRM technology has not and never will be 100 percent secure. One can

naturally expect this to happen in digital media and business models have to

acknowledge some degree of piracy will happen rather than pretend it

won't," said Sinnreich.

This is the second time that Microsoft's DRM technology has been compromised.

Programmers in 1999 breached security features used in Windows Media audio

version 4 the day after it was released, but the company quickly fixed the

problem, it said.

"The fact that they got hacked is no big shock," said GartnerG2

analyst P J McNealy. "This is a high-profile piece of software and not

surprising it was a target."

(C) Reuters Limited.