Copyright law 'state-sponsored piracy': Apple

22nd March 2006, Comments 0 comments

NEW YORK, March 22, 2006 (AFP) - French fans of online music face the traumatic loss of Apple Computer's popular iTunes store under a controversial new law, US industry observers warned.

NEW YORK, March 22, 2006 (AFP) - French fans of online music face the traumatic loss of Apple Computer's popular iTunes store under a controversial new law, US industry observers warned.

For the iPod maker itself, the copyright law working its way through the French parliament amounts to nothing less than "state-sponsored piracy".

The lower house of the French legislature on Tuesday passed a bill that would force Apple to make its downloads work on all digital music players and not just on the iconic iPod.

Analysts said Apple would have to choose between sharing the secrets of the exclusive online music technology that has helped make it a market leader — or, more likely, stop selling music downloads in France.

Jim Prendergast, executive director of the public policy group Americans for Technology Leadership, said the vote was "a direct attack" on Apple's intellectual property.

Warning the measure would "have a chilling effect on future innovation," Prendergast said Apple could pull iTunes out of France, "giving consumers less choice when it comes to popular digital music."

"Consumers will lose even more in the long term if France, and other nations, continue to strip away the intellectual property rights of companies like Apple," he said.

"Once governments force companies to give away their innovations, their intellectual property rights there will no longer be an incentive to create new products that will benefit consumers."

Gene Munster, an analyst with stockbroker Piper Jaffray, said France is responsible for less than two percent of Apple's iPod and iTunes sales.

But he warned that the company "would prefer to remove itself from the French market than start what could be a slippery slope of other countries passing similar legislation".

Apple has yet to comment on what it plans to do with iTunes in France following the vote, which has still to be approved by the upper house.

But in a hard-hitting statement late Tuesday, it said the French implementation of a new European Union law on copyright "will result in state-sponsored piracy."

"If this happens, legal music sales will plummet just when legitimate alternatives to piracy are winning over customers," it said.

IPod sales could increase as French users win the ability to load their players with whatever online music they like, but this music "cannot be adequately protected," Apple warned.

"Free movies for iPods should not be far behind in what will rapidly become a state-sponsored culture of piracy," it added.

Supporters of the French legislation argue it will better protect the rights of musicians and other artists whose work is sold online.

The law would require all firms that sell music online to make available the software codes that protect copyrighted material so that iTunes purchases, for example, could be played on devices manufactured by other companies.

The stakes are highest for Apple, the market leader in this sector. The US company said last month that sales on iTunes had topped the one billion song mark.

Apple's share price fell 3.4 percent Tuesday after the French vote.

On Wednesday, the stock was up for much of the day on problems besetting its rival Microsoft, before turning down 0.23 percent to close at US $61.67 as concerns about the French legislation deepened.

Copyright AFP

Subject: French news

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