Apple terms French law 'state-sponsored piracy'
Apple Computer Inc. has blasted France over a law, passed Monday, that would force it to make iTunes songs playable on digital players made by competing companies.
The French lower house of parliament passed a new copyright bill Monday that says copy-protection technologies must not stop interoperability between different systems.
Apple is the dominant force in legal downloading of music and believes it would be hardest hit by the law, which has yet to gain Senate approval.
"The French implementation of the EU Copyright Directive will result in state-sponsored piracy," Apple said in a prepared statement.
The U.S.-based computer company warned that consumers would use the interoperability option to freely trade music and, eventually, movies.
"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," an Apple spokesperson said.
France has labelled current copy-protection technologies "anti-competitive."
Companies such as Microsoft and Sony, which are racing to catch up with Apple with digital music technologies, could also be affected.
The French government said the law was drawn up to ensure no single company dominates the fast growing music download market. It has said it will encourage the European Union to adopt similar laws.
"These clauses, which we hope will be taken up by other countries, notably at the European level, should prevent the emergence of a monopoly in the supply of online culture," National Assembly deputies Richard Cazenave and Bernard Carayon said in a statement Tuesday, according to Reuters.
Apple may be faced with withdrawing its iTunes music store from France, or complying with rules that would demand it share its copy-protection software.
Shaw Wu, an analyst at American Technology Research, estimates that less than five per cent of Apple's overall revenue comes from sales of iPods and iTunes songs in France.
The software that prevents iTunes songs from being played on MP3 players other than iPods or Motorola's iTunes mobile phones is a huge competitive advantage for Apple, he says.
"There's no doubt that the fact it's a closed system has been a reason for Apple's success with the iPod," Wu says.
Other technology companies may be preparing to battle the French approach to copyright before it spreads.
"The vote today by French lawmakers is a direct attack on Apple's ability to design its own products and on the company's intellectual property rights, which will have a chilling effect on future innovation," said Jim Prendergast, executive director of Americans for Technology Leadership, a U.S. group that lobbies against government regulation.
He said Apple could pull its iTunes service from France, leaving consumers with less choice.
A recent study by EU project Indicare found consumers would be prepared to pay twice as much for a song that can freely move between different devices.
The French copyright bill also contains provisions for prosecuting people who download illegally or share illegally downloaded files. It is not yet known when it will reach the Senate.