Leading lawmakers have agreed to water down a draft law that could have threatened the future of the iPod in France.
The National Assembly had voted in March to force companies like Apple Computer Inc. to make their online music stores and players compatible with rival products, but key members say they have agreed to many of the weaker measures endorsed by senators.
The draft adopted by the Assembly had contained a blanket demand that companies share their exclusive copy-protection technologies with rivals, effectively free of charge.
But the compromise text, due to be approved Thursday by a committee of legislators from both houses, maintains a Senate loophole that could allow Apple and others to sidestep that requirement by striking new deals with record labels and artists.
A new regulatory authority would be established with the power to resolve disputes by ordering companies to license their exclusive file formats to rivals _ but only if the restrictions they impose are "additional to, or independent of, those explicitly decided by the copyright holders."
This means that Apple and Sony Corp. could avoid having to share their FairPlay and ATRAC3 file formats, lawyers say, providing they obtained permission from the artists whose music they sell.
Christian Vanneste, the governing party deputy who presented the bill to the Assembly _ the lower house — said that a rival company's right to market compatible products and services would "hang on the will of the copyright holder" under the terms of the compromise.
Speaking in an interview with The Associated Press, he added, "It's perfectly legitimate that the artist should decide the potential limitations on the use of his work."
Vanneste and another center-right deputy, Dominique Richard, said the compromise commands "pretty much unanimous" support among the lower house lawmakers who represent the governing Union for a Popular Movement on the joint committee.
The changes represent a small but significant change to France's earlier collision course with Apple, which condemned the lower house proposals as "state-sponsored piracy." Analysts predicted that the California-based computer company would close its French iTunes store rather than comply.
The apparent softening comes as several other European nations are mulling action to force Apple to open the iTunes store to rivals' players. In a joint letter this month, consumer agencies in Norway, Sweden and Denmark accused Apple of violating contract and copyright laws with its product usage restrictions.
French consumer groups, which have pressed hard for a strict interoperability requirement, criticized the weaker measures adopted by the Senate last month.
"They're washing their hands of the consumer," said Frederique Pfrunder, a spokeswoman for the CLCV, one of the country's main consumer organizations.
Confronted with the market power of iTunes _ Apple claims an 80 percent share of U.S. music downloads but publishes no figures for individual European markets _ copyright holders will have to agree to maintain the exclusive iPod link, Pfrunder said. "If they refuse, they'll lose their deals."
But the Brussels-based Business Software Alliance, which represents companies including Apple, Microsoft Corp. and Hewlett-Packard Co., said the need for artists' authorizations could strengthen the hand of music companies as they seek changes to the pricing on iTunes, which is currently the same for every track.
EMI Group PLC, Sony BMG and Warner Music Group Corp., three of the world's four major recording companies, have pressed Apple to allow different tracks to be sold at different prices — so far without success.
Giving more leverage to recording companies in their negotiations with Apple "could lead to an increase in prices," said BSA policy director Francisco Mingorance. "It would definitely harm consumers."
Before becoming law, the compromise text adopted by the joint committee requires a final vote of approval in the National Assembly and Senate. The governing UMP commands an absolute majority in both houses.