Apple Runs into Trouble With French Parliament

The French Parliament wants Apple to open up its "FairPlay" Digital Rights Management technology to make it useable on all MP3 players — not just iPods. Melissa Block talks with Financial Times Technology editor Richard Waters about what this means for Apple.

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MELISSA BLOCK, host:

France is taking a hard line against proprietary software. Today, the Lower House of the French Parliament approved a copyright law that would force Apple Computer, Sony and other companies that own online music stores to share technologies. The iPod and iTunes software command a huge share of the digital music industry, and currently, if you download a song off iTunes, you can't play it on, say, a Sony Walkman. Richard Waters is Technology Editor for the Financial Times. He says the bill is intended to stop Apple from holding a virtual monopoly.

Mr. RICHARD WATERS (Technology Editor, the Financial Times): It requires a full interoperability between any digital music service or site that you buy a song from online, and then any music player, like an iPod or another MP3 player that you want to use that song with. So it basically aims to break that, you know, the direct link between Apple's iPod and Apple's iTunes.

BLOCK: So if now you could only download iTunes onto an iPod, under the French proposal, you could download it onto any other MP3 player?

Mr. WATERS: Well, that is the effect of it, but the detail is what's going to count here. The law is very, very vaguely worded, and it may be, for instance, that Apple will be able to argue that because you can download a song onto your PC or your Apple Mac from iTunes, and then burn a CD of those tunes that actually, maybe, already these songs are fairly transportable, and, actually, they don't have the stranglehold that the French say. So, you know, the French aren't being too specific about what they want here.

BLOCK: Who's behind this?

Mr. WATERS: Well, this is the Cultural Ministry in France, and it's not coming from the competition authorities, interestingly. It's the very powerful French cultural authorities, who obviously often have a say on the type of media that the French consumers can access. You know, they're obviously very protective of the French culture and French language, and I think they're very concerned here that an American company, in particular, will get to dictate the actual media that their consumers can access.

BLOCK: So they're actually in a position of ordering a competition, in a sense, so that consumers would benefit.

Mr. WATERS: Well, they say consumers will benefit. That's their stated objective here. And, yes, by passing a law like this, you know, they have the right to force open Apple's system. Apple, of course, has the option simply to say, well, we don't want to play by your rules, and thank you very much, we won't take part in your market. But certainly the French seem to have the power to do this if they want to.

BLOCK: Well, how would that work? Apple would just pull iTunes out of France?

Mr. WATERS: Well, I think there's a lot of negotiation going to be going on here in the next few months. A lot of French consumers have iPods. They use the service, they like the service. So presumably, there'll be some sort of consumer backlash. There'll be some complaints about the implications of that. Behind the scenes, I think Apple will be fighting very hard and lobbying hard, trying to persuade the U.S. authorities to back them in this one, and complain about this as a restraint on trade in some ways. But right now they are, they're just keeping their heads down.

BLOCK: That was Richard Waters, technology editor for The Financial Times. Late today Apple released a statement saying that if the French law goes through, it will “result in state-sponsored piracy. If this happens,” Apple continued, “legal music sales will plummet just when legitimate alternatives to piracy are winning over customers.”

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