France amends bill amid opposition from Apple (Reuters)

PARIS/LONDON (Reuters) - The French Senate has made changesto a controversial copyright bill that threatens Apple's gripon the online music market by making it open its iTunes storeto portable music players other than Apple iPods.

Senators introduced amendments late on Wednesday to assuagefears of companies such as Apple which have claimed the newlegislation would result in "state-sponsored piracy."

The draft law, passed by the French lower house in March,requires that online retailers, including Apple'smarket-leading iTunes, provide access to the software codesthat protect copyrighted material -- known as digital rightsmanagement -- to allow the conversion from one format toanother.

Currently, songs purchased from Apple's market-leadingiTunes service can only be played on PCs, iPod portable musicplayers or Motorola Inc's iTunes mobile phone.

Similarly, iPods are not compatible with music that usesDRM from rival companies such as Microsoft.

Under the Senate's new version, a company that agrees toprovide these codes will receive a license fee as compensationalong with guarantees that the transfer of information will notweaken its copyright protection measures.

"We have to ensure that interoperability does not open thedoors to abuse," a Senate representative, who did not wish tobe identified, told Reuters on Thursday.

NEW AUTHORITY

In addition, the Senate has called for the creation of anindependent authority, the Authority for the Regulation ofTechnical Measures, that would review demands for DRMinformation transfers.

The new regulator would also ensure that third partiesmaintained the original protections and conditions.

"The Senate, instead of enabling anyone to hack in, putsthe matter in the hands of a regulatory authority, which willtake decisions and potentially oblige companies to disclosetheir source code," said Olivia Regnier, European regionalcounsel for the music industry trade group, the InternationalFederation of the Phonographic Industry.

"We feel that the provision voted by the Senate is betterbalanced, there's an explicit expectation to respect the rulesof the game."

It is not yet clear whether Apple will comply with the lawor shut down its iTunes store in France, a move that would onlyhave minimal impact on the U.S. company's total sales, analystshave said.

Apple declined to comment.

Contrary to some media reports, Regnier said there wasnothing in the new version of the law that explicitly orimplicitly gave a way out for Apple.

Her view was echoed by a legislative aide at France's lowerhouse of parliament.

"Such (a loophole) would go against the spirit of the law... but ultimately, everything will depend on how the law isinterpreted by this new authority," the aide stressed.

Representatives from the two houses of parliament will nowmeet to reconcile the two versions of the bill which couldbecome law as early as next month if all goes well.

Consumers are ready to pay twice as much for a song thatcan freely move between different devices, a recent study ofthe project Indicare showed.

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