March 22, 2006 12:47 PM PST
Apple calls French law 'state-sponsored piracy'
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France's lower house of parliament passed a law Tuesday that would require digital content providers to share details of their rights management technologies with rivals. iTunes songs are protected by Apple's FairPlay technology and are incompatible with most non-iPod players. The bill, designed to prevent any single music-playing technology--and hence, any one media seller or device maker--from dominating the online market, now moves to France's senate.
"The French implementation of the EU Copyright Directive will result in state-sponsored piracy," Apple said in a statement. "If this happens, legal music sales will plummet just when legitimate alternatives to piracy are winning over customers. iPod sales will likely increase as users freely load their iPods with 'interoperable' music which cannot be adequately protected. Free movies for iPods should not be far behind in what will rapidly become a state-sponsored culture of piracy."
Apple's dominant iPod works with songs purchased on iTunes--the dominant online media store--and with tracks that are not copy protected, but it doesn't play songs that are protected by Sony's or Microsoft's digital rights management software and sold through non-iTunes services.
Apple could choose to withdraw iTunes from the French market rather than change its business, Piper Jaffray senior analyst Gene Munster speculated in a research note on Tuesday.
"We believe Apple is more likely to drop out of the French market than open up its FairPlay DRM to allow iTunes to play on competing MP3 players," he wrote. "While this sounds like a drastic move, we believe it would not materially impact business. We estimate that approximately 20 percent of iPod and iTunes sales occur outside of the U.S. The French market alone is likely less than 2 percent of iPod and iTunes business."
An Apple spokesman said he could not comment on what action Apple might take if the measure becomes law in France.
CNET News.com's Ina Fried contributed to this report.
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