France Proposes Legislation That Would Bypass iTunes' DRM System

French lawmakers are contemplating legislation that would force online music providers, primarily Apple (Nasdaq: AAPL) and its iTunes service, to open their services to other formats and devices by allowing the circumvention of digital rights management (DRM) technology.

French officials will vote on the measure this week, and while it may have significant implications for Apple if passed, it may also spell Apple's departure from the French market, some industry watchers speculate.

"Clearly, Apple's agreements with the labels are going to revolve around DRM," Jupiter Research Vice President Michael Gartenberg told MacNewsWorld. "This may put Apple in a position of having to close down its service in France."

Uniquely French

This latest move in France comes after last year's measure to legalize unlicensed file-sharing, which drew harsh criticism from the recording industry.

Now France is ruffling feathers again, with proposed rules that would legalize use of software that cracks DRM and converts digital music to other formats.

While Apple's iTunes is the leading music service in most markets around the world, it is among the only so-called "legitimate" services available in France, according to analysts.

Aim of Authority?

It may be unrealistic for France to think it can legally force Apple to open iTunes to competition, according to Mike Goodman, senior analyst at the Yankee Group.

However, by allowing users to disable or bypass Apple's Fair Play DRM scheme, the French may achieve the same effect, Goodman said.

"That might be the way to get around [a legal requirement]," he told MacNewsWorld.

Goodman said although France may have legitimate monopoly concerns when it comes to Apple's operation of iTunes in France, the underlying motivation of its proposed legislation is unclear.

DRM Reality

Realistically, though, if the French law is passed, it is hard to imagine how Apple could keep its iTunes service available in France, Jupiter's Gartenberg said.

The analyst indicated that DRM is a basic requirement of legitimate, digitally distributed music, and Apple's particular solution has not been seen as overly cumbersome. On the contrary, Sony's (NYSE: SNE) DRM solution released last year caused not only controversy, but lawsuits against the company.

"At the end of the day, DRM is something users are going to have to deal with," Gartenberg said.

He added that the French situation is, from his perspective, "much ado about nothing," since iTunes files can already be purchased, downloaded, burned to CDs and converted back to other formats, including MP3.