March 23, 2006

UPDATE — What’s French for “Legalized Piracy”?

Filed under: Business Moves, Economy, Taxes & Government — TBlumer @ 10:05 am

Today, following through on a threat/promise described in this BizzyBlog post from March 14, French legislation to virtually decriminalize content piracy and to force require open music-player systems as a condition of being able to sell them in that country passed its first hurdle, and got a reaction from its obviousl target:

French lawmakers approved an online copyright bill Tuesday that would require Apple to break open the exclusive format behind its market-leading iTunes music store and iPod players.

The draft law - which also sets new penalties for music pirates - would force Apple Computer Inc., Sony Corp. and others to share proprietary copy-protection technologies so that rivals can offer compatible services and players.

Lawmakers in the National Assembly, France’s lower house, voted 296-193 to approve the bill. The legislation now has to be debated and voted by the Senate - a process expected to begin in May.

Breaking days of silence late Tuesday, Apple said such a law would “result in state-sponsored piracy.”

“If this happens, legal music sales will plummet just when legitimate alternatives to piracy are winning over customers,” the company said in a statement e-mailed to reporters. “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.”

The Cupertino, Calif. company did not address the issue of whether it might withdraw from the French online music market, and refused further comment.

Under the bill, companies would be required to reveal the secrets of hitherto-exclusive copy-protection technologies such as Apple’s FairPlay format and the ATRAC3 code used by Sony’s Connect store and Walkman players.

That could permit consumers for the first time to download music directly to their iPods from stores other than iTunes, or to rival music players from iTunes France.

Apple has most to lose because of its phenomenal penetration of the digital music market, according to analysts. Critics of the French move say legislators have no business forcing Apple to share its proprietary format - arguing that customers know its limitations when they choose to buy an iPod.

A spokesman for Culture Minister Renaud Donnedieu de Vabres, who backed the crucial amendments, dismissed suggestions that the bill would unfairly damage Apple.

“We’re targeting absolutely no one with this bill,” Paul Rechter said.

Rather, he said, the legislation is designed to discourage online piracy by offering additional legal ways for music players and online stores to work together.

“When this happens, iTunes will have the French government to thank for making it possible to draw so many Internet users toward legal platforms,” Rechter added.

Isn’t it amazing how government hack Mr. Rechter knows more about how to improve Apple’s branding than the people who actually run Apple’s business in Cupertino (and Sony’s for the matter)? (/sarcasm)

No Comments »

No comments yet.

RSS feed for comments on this post. TrackBack URI

Leave a comment (moderated)