updated 8/26/2004 6:33:25 PM ET 2004-08-26T22:33:25

Copy protection technologies used to prevent CDs from being pirated online are facing a legal challenge in France, where a judge began a formal investigation of record label EMI Group PLC for using them.

Confirming a report in French financial daily Les Echos, the record store Fnac said Wednesday it has also been placed under investigation by a French judge along with EMI's French arm.

The record company did not respond to requests for comment.

The lawsuit accuses EMI and Fnac of "deception over the material qualities of a product."

Filed on behalf of several individual consumers, it alleges that the copy protection system used on certain EMI discs makes it impossible to play them on many car stereos, hi-fi's and personal computers.

French consumer association UFC-Que Choisir is seeking damages in the legal action, which also claims that EMI's copy protection stops customers from making personal copies of their CDs, a privilege granted to French consumers by a 1985 law.

Julien Dourgnon, deputy director of the consumer group, said the ability to make copies for private use, for example by transferring music to a portable MP3 player, was important to many record buyers.

"We're defending that freedom, we're not defending piracy," he said.

Fnac and EMI face a maximum fine of $227,000, excluding damages, if they lose, Les Echos reported. They could also be ordered to remove all affected CDs from sale, a measure that could cost the record label much more.

In its statement, Fnac, a unit of luxury and retail giant Pinault-Printemps-Redoute SA, said it has informed shoppers of potential problems with protected CDs and offered full refunds to affected customers.

"Fnac is confident about the outcome of this case," the statement added.

More companies face lawsuits
EMI is not alone in using the copy protection systems known collectively as digital rights management in a bid to stop people uploading music onto the Internet.

UFC-Que Choisir is also heading a separate lawsuit against Warner Music Group in support of a consumer's complaint that its copy protection system prevented CDs being transferred to a portable MP3 player via a computer hard disc.

The music majors have introduced the technology much more cautiously in the United States, fearing it could scare off customers.

But "Contraband" by Velvet Revolver, a band newly formed by ex-members of Guns N' Roses and the former frontman of the Stone Temple Pilots, became a best seller in June despite heavy copy protection and a warning on the packaging. More protected U.S. releases could follow.

Many of the systems in use are designed to make audio CDs unreadable by personal computers by including a bogus data track that makes the audio part of the disc invisible to a CD ROM drive.

The technologies are intended to curb surging online piracy that has cost record companies billions of dollars in recent years and led to widespread layoffs in the industry.

But most devices are relatively easy for determined pirates to crack, and consumer groups like UFC-Que Choisir argue that they just end up hurting law-abiding record buyers.

"The side effects are much stronger than the medicine's desired effect," Dourgnon said.

No date has yet been set for a final ruling in the case.

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