Apple hopes for toned-down French download law

Fri Jun 23, 11:06 AM ET

PARIS (Reuters) - Apple Computer Inc. said on Friday it was awaiting final approval of a French bill aimed at opening online media stores to rivals, which it hoped would leave the market to decide which systems prevailed.

"We are awaiting the final result of France's legislative process," Apple spokesman Alan Hely said in an emailed statement. "(We) hope they let the .... marketplace ... decide which music players and online music stores are offered to consumers."

A committee of both houses of the French parliament on Thursday approved a compromise proposal that would set limits on an original draft bill to open up online content businesses.

Apple had called that draft "state sponsored piracy" and there were even suggestions it might pull its market-leading iTunes operation out of France if the bill was passed.

The original bill would have obliged online music stores to open their digital rights management (DRM) systems, so that consumers can play the songs purchased in one on-line music store on portable MP3 devices and computers that are designed to work with another music store.

At present, DRM means a song bought on iTunes can only be played directly on Apple technology like the iPod, although it can also be burned on to compact discs.

The new proposal, based on amendments proposed in the Senate last month, is expected to be voted on in parliament on June 30, before becoming law but will not be subject to a second reading that could introduce major changes.

Following amendments passed in the Senate last month, the principle of so-called "interoperability" between different music stores and music playing devices will still apply.

But the previous blanket requirement for Internet media stores to lower the technical barriers around content sold on their sites will be subject to various limits, notably allowing them to argue that restrictions were set at the request of copyright holders.

It would also give media stores a greater margin of maneuver by granting the power to settle disputes and oversee copyright control to an outside regulatory authority, instead of facing a flat interoperability requirement.

Apple's iTunes service is currently the biggest online content store after the runaway success of the iPod player but it faces competition from several rivals including Sony Corp (NYSE:SNE - news), Dell Inc. and Microsoft.

Consumer groups have criticized the amendments and the opposition Socialists denounced the compromise as a "facade" which amounted to a "capitulation" to Apple and Microsoft.