France Lawmakers Approve 'ITunes Law'

The Associated Press
Friday, June 30, 2006; 7:53 PM

PARIS -- French lawmakers gave final approval Friday to government-backed legislation that could force Apple Computer Inc. to make its iPod music player and iTunes online store compatible with rivals' offerings.

Both the Senate and the National Assembly, France's lower house, voted in favor of the copyright bill, which some analysts believe may cause Apple to close iTunes France and pull its market-leading player from the country's shelves.

Currently, songs bought on iTunes can be played only on iPods, and an iPod can't play downloads from other stores with similar premium content from major artists _ like Napster and Sony Corp.'s Connect.

Apple, which had described an earlier draft of the copyright bill as "state-sponsored piracy," did not respond to calls and messages seeking comment on Friday's vote.

But in a statement issued after lawmakers hashed out the final compromise text last week, the company said it hoped the market would be left to decide "which music players and online music stores are offered to consumers."

The vote was the last legislative step before the bill becomes law, barring the success of a last-ditch constitutional challenge filed by the opposition Socialists and Greens. The law would take effect only after that challenge is exhausted _ a process set to take several weeks.

In a sign that other governments may follow France's example, there have been recent proposals or regulatory moves to open up iTunes in Britain, Sweden, Denmark, Norway and Poland.

Consumer advocates argue that breaking the exclusivity of services like iTunes and Connect would benefit online music buyers. "Whenever there's a choice, for consumers it's always a good thing," said Michael Gikas, a spokesman for the U.S.-based Consumers Union.

"It's a shame that people can't separately choose the best player and the best site," he said.

But Americans for Technology Leadership, an organization founded by technology companies including Microsoft Corp., said consumers would ultimately suffer from what they see as excessive regulation.

Legislative moves like France's "break the cycle of innovation that benefits consumers by destroying the incentive companies have to create new and better products," the group said in a statement.

The French law states that companies are expected to share the required technical data with any rival that wants to offer compatible music players and stores.

"Any artist's work that is legally acquired should be playable on any digital device," Culture Minister Renaud Donnedieu de Vabres told lawmakers before the vote.

But the final text tones down many of the tougher measures adopted by the lower house in March. It also maintains a Senate loophole that could allow Cupertino, Calif.-based Apple and others to dodge the data-sharing demands by striking new deals with record labels and artists.

A new regulatory authority will have the power to order companies to comply with requests from rivals to license their exclusive file formats, or face heavy fines _ 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. But much could depend on the law's interpretation by the French courts, as well as the stance taken by recording companies.

Much of the music industry is in favor of more compatibility between different online stores and players, as it tries to break out of the single-price model imposed by iTunes _ which charges the same rate for every standard-length track.

Britain's main recording industry lobby, the BPI, recently told Parliament that iTunes should be made compatible with rivals' devices.

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

© 2006 The Associated Press