French Lawmakers Soften ITunes Proposal

A giant advertisement for the Apple iPod adorns the main entrance of Cannes Festival Palace, where the 38th MIDEM (International record music publishing and video music market) was taking place in Cannes, southern France, in this Jan. 27, 2004 file photo. Leading French lawmakers agreed Thursday, June 22, 2006 to water down a draft copyright law that had threatened the future of the iPod in France. The compromise text, approved by a joint committee of senators and National Assembly lawmakers, stops short of many of the tougher proposals adopted by the lower house. (AP Photo/Lionel Cironneau, File) (Lionel Cironneau - AP)

In a joint letter this month, consumer agencies in Norway, Sweden and Denmark accused Apple of violating contract and copyright laws.

The French compromise text, approved Thursday by a joint committee of senators and Assembly members, is subject to a final vote this month in the two chambers, both controlled by the governing Union for a Popular Movement. Only the government can introduce further amendments.

The bill will establish a new regulatory authority that can order companies to license their exclusive file formats to rivals _ but only if the restrictions they impose are "additional to, or independent of, those explicitly decided by the copyright holders."

Lawyers say this means Apple and Sony could avoid sharing their FairPlay and ATRAC3 formats, providing they obtained permission from the artists whose music they sell.

Consumer organizations argue that musicians confronted with the market power of iTunes _ Apple claims 80 percent of legal U.S. downloads but publishes no figures for individual European markets _ would be unable to refuse such a condition.

"The consumer's right to interoperability has been made unenforceable on the pretext of defending copyright," said Cedric Musso, a spokesman for consumer group UFC-Que Choisir, which campaigned for a watertight compatibility requirement.

Christian Vanneste, the governing party deputy who presented the bill to the Assembly, defended the compromise against heavy criticism from consumer groups and left-wing lawmakers, who walked out of Thursday's session.

"It's perfectly legitimate that the artist should decide the potential limitations on the use of his work," Vanneste said in an interview with The Associated Press ahead of the vote.

The increased say for artists could strengthen the hand of recording companies as they seek more flexible pricing on iTunes _ currently the same for every track _ in tense negotiations with Apple.

IFPI, the recording industry's main global body, said the sector "fully supports interoperability" but declined to comment on whether recording companies might resist attempts to secure rights owners' backing for compatibility restrictions.

The French draft law also introduces new penalties for a range of online piracy offenses _ up to a maximum three-year jail term and 300,000 euro ($380,000) fine for knowingly offering or advertising a download service for pirated music or video.

Unlike the lower house text, the compromise does not allow consumer groups or individuals to file complaints to the new authority.

The lawmakers also scrapped an earlier proposal allowing copy-protection technologies to be legally hacked when they prevent rival music players and sites working together.