France to Approve DRM "iPod Loophole"

June 21st, 2006 at 3:00 PM - News by Jeff Gamet

French lawmakers plan to modify the bill that would have forced companies to share their digital rights management technology. According to Forbes, the French Lower House has agreed to keep wording that offers companies like Apple and Sony a loophole that protects their proprietary copy protection systems.

The proposed changes, due to be approved Thursday, lets companies refuse to share DRM technologies as long as the music copyright holders they represent agree. With appropriately worded contracts, Apple, Sony, Microsoft, or any other company that sells DRM protected music in France can keep their proprietary copy protection schemes out of the hands of competitors.

A new regulatory agency will be established to resolve licensing disputes, and will have the authority to force companies to share their DRM technology with competitors if the restrictions imposed are "additional to, or independent of, those explicitly decided by the copyright holders."

The intent of the original bill was to create an open playing field where consumers could purchase digital music from any service and play it on any device. Apple and several other companies opposed the legislation because it required them to share information about their copy protection systems with almost anyone. The result, they feared, was that music piracy would skyrocket.

Many analysts predicted that Apple would shut down the iTunes Music Store in France to protect its FairPlay copy protection.

Although the new wording in the bill sounds like good news for digital music service providers, not everyone is happy. Frederique Pfrunder, a spokeswoman for the CLCV, one Franceis main consumer organizations, said that the France is "washing their hands of the consumer," fearing that the legislation will let companies like Apple dictate music pricing to the recording labels.

Copyright holders will be forced to agree to the distributoris terms. "If they refuse," she says, "theyill lose their deals."

The bill could potentially work against digital music services, according to Business Software Alliance policy director, Francisco Mingorance. He says labels may refuse to provide music if the distributors donit agree to their pricing terms, which could force Apple to raise song prices. "It would definitely harm consumers."

Once the new wording is approved for the bill, a final vote is required by Franceis Senate and national Assembly before it becomes law.