France Throws Down Gauntlet On iPods

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, Tuesday Jan. 27, 2004.
AP Photo/Lionel Cironneau
French lawmakers approved an online copyright bill Tuesday that would require Apple to break open the exclusive format behind its market-leading iTunes music store and iPod players.

The draft law — which also introduces new penalties for music pirates — would force Apple Computer Inc., Sony Corp. and others to share proprietary copy-protection technologies so that rivals can offer compatible services and players.

Lawmakers in the National Assembly, France's lower house, approved the bill 286-193. The legislation now has to be debated and voted by the Senate — a process expected to begin in May.

Apple has so far refused to comment on the bill or on analysts' suggestions that the Cupertino, Calif.-based company might choose to withdraw from the French online music market rather than share the proprietary technology at the heart of its business model. Representatives for Apple France did not return calls Tuesday.

"Apple is certainly not the only company that is affected by this,'' said Technology Analyst Larry Magid. "Virtually any company that sells online music has to include digital rights management to protect the copyright holders. The issues here are whether these digital rights also restrain competition.

"The world of digital music is currently set up with these little islands that you can't break away from," says Magid (audio). "It's as if you bought a CD from Sony Music that could only be played on a Sony CD player. If you buy a song from iTunes and want to play it on a portable music player, it pretty much has to be an iPod."

Under the bill, companies would be required to reveal the secrets of hitherto-exclusive copy-protection technologies such as Apple's FairPlay format and the ATRAC3 code used by Sony's Connect store and Walkman players.

That could permit consumers for the first time to download music directly to their iPods from stores other than iTunes, or to rival music players from iTunes France.

The new legislation would also introduce penalties ranging from $50 to $180 for those caught pirating music or movies at home and $4,600 for hackers who disable copy-protection systems. Those caught distributing software for online piracy face fines of up to $365,000 and jail terms.