Gallic bill bites for Apple

Pols want iTunes interoperability

PARIS — Gallic pols forwarded a copyright bill Tuesday that could radically alter the way music is sold over the Internet and drive Apple’s iTunes out of France.

The proposed law, the first of its kind in any country, would force online musicstores to make their tracks playable on any portable digital device. Users would legally be allowed to circumvent antipiracy software if such compatibility is not established.

Other companies, most notably Microsoft — the only other significant player in digital music software — would have to openly license their digital music software as well. They’re unlikely to object, however, since Microsoft is eager to gets songs encoded with its software onto iPods.

But Apple has built its business by linking its market-dominating iPod, which has an estimated worldwide market share around 60%, exclusively to its iTunes Music Store and vice-versa.

“The French implementation of the EU Copyright Directive will result in state-sponsored piracy,” said Apple spokeswoman Natalie Kerris in a statement to Reuters. “If this happens, legal music sales will plummet just when legitimate alternatives to piracy are winning over customers.”

If the bill passes, the company would likely pull iTunes out of the French market rather than set a precedent of opening its antipiracy software to other companies.

Competitors and proponents of open technology have repeatedly urged Apple to open the iPod to other musicstores, but company has repeatedly refused, seeking instead to have iTunes and iPod feed off each other’s success.

Withdrawing from France would not affect Apple’s bottom line dramatically. The Gallic iTunes, which Apple launched in June 2004, represents less than 2% of the company’s online music business. Whether or not Apple continued to operate iTunes in France, it would still be able to sell its hugely popular — and profitable — iPods.

“IPod sales will likely increase as users freely upload their iPods with ‘interoperable’ music which cannot be adequately protected,” Kerris said. “Free movies for iPods should not be far behind.”

The bill, which passed the French National Assembly 296 to 193, would also institute graduated punishment for illegal downloading. The fees range from ¢38 ($46) for illegally downloading a file up to $363,000 and three years in prison for commercializing software used for piracy.

Bill must still be approved by the Senate, which will debate it in May, but it has passed its biggest political hurdle.

Tuesday’s vote follows an upset in the parliament in late December, when politicos from different sides of the fence banded together to vote down a punitive law on peer-to-peer file-sharing and introduce an amendment that would legalize P2P in return for a nominal monthly charge. Bill was reworked in early March, and the amendment was dropped amid outcries from Socialist and center-right UDF deputies.

(Ben Fritz in Hollywood contributed to this report.)