France pushes ahead with iTunes law

Lawmakers approve a law that aims to prevent Apple or any other company from getting a monopoly on digital music.

France's lower house of parliament passed a law on Tuesday that could challenge Apple Computer's dominance of the online digital music market by making it open its iTunes store to portable music players other than its iPods.

French officials said the law is aimed at preventing any single media playing system--Apple's iTunes or Microsoft's Windows Media Player, for example--from building a grip on the digital online music retail market.

"These clauses, which we hope will be taken up by other countries, notably at the European level, should prevent the emergence of a monopoly in the supply of online culture," Richard Cazenave and Bernard Carayon, National Assembly deputies from the ruling UMP party, said in a statement on Tuesday.

"The French implementation of the EU Copyright Directive will result in state-sponsored piracy."
--Natalie Kerris, spokeswoman, Apple

The new legislation was adopted by the National Assembly with 286 votes in favor and 193 against and will be examined in the upper house, the Senate, in May.

The law would require that online music retailers such as iTunes provide the software codes that protect copyrighted material--known as digital rights management (DRM)--to allow the conversion from one format to another.

"Any interested party can ask the get a supplier (of content) provide information that is essential for 'interoperability,'" France's new copyright law states, so that content can be read on any hardware support.

Apple responded Tuesday night that if the law passes, it would only lead to increased piracy.

"The French implementation of the EU Copyright Directive will result in state-sponsored piracy," spokeswoman Natalie Kerris said from Apple headquarters in Cupertino, Calif. "If this happens, legal music sales will plummet just when legitimate alternatives to piracy are winning over customers."

The new piece of legislation will also allow consumers to use software that circumvents DRM only if it is done to convert digital content from one format to another. Using such software is currently illegal in much of the world.

Currently, songs purchased from the market-leading iTunes service can only be played on iPods or Motorola's iTunes mobile phone, and iPods are not compatible with music that uses DRM from rival companies such as Microsoft.

Consumers are prepared to pay twice as much for a song that can freely move between different devices, a recent study of the European Union project Indicare showed.

Cause for concern
"This creates legitimate concerns for content providers," Olivier Cousi, a copyright lawyer at French law firm Gide Loyrette Nouel said on Tuesday. "The problem is that it may risk weakening systems that are used to protect against piracy."

The law could potentially hurt sales of iPods in France if consumers were able to play iTunes songs on other players. It could also lead Apple to close its French iTunes online store to preserve its DRMs.

Microsoft in France declined to comment on Tuesday.

"The vote today by French lawmakers is a direct attack on Apple's ability to design its own products and on the company's intellectual property rights, which will have a chilling effect on future innovation," said Jim Prendergast, the executive director of Americans for Technology Leadership, a U.S. lobby group.

"Apple could immediately pull its iTunes product from France, giving consumers less choice when it comes to popular digital music," he added.

The law would affect other French online music stores as well such as Fnac, part of retail group PPR, Virgin, whose French retail operations are owned by media group Lagardere, and Vivendi Universal Music, part of the telecoms and media group Vivendi.

The government says the new law is designed to boost the legal digital music market and adapt the country's copyright rules to the rapidly changing online content market.

Story Copyright © 2006 Reuters Limited. All rights reserved.

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