France's lower house of parliament passed on Tuesday the proposed law for intellectual property on the Internet that could challenge Apple's dominance of the online digital music market by making it open its iTunes store to portable music players other than the iPods.

The new legislation would require that online music retailers provide the digital rights management software that protects copyright material to allow the conversion of music in another format such as Apple's FairPlay format and the ATRAC3 code used by Sony's Connect store and Walkman players.

"These clauses, which we hope will be taken up by other countries, notably at the European level, should prevent the emergence of a monopoly in the supply of online culture," Richard Cazenave and Bernard Carayon, National Assembly deputies from the ruling UMP party, said in a statement on Tuesday.

From Santa Clara California, Apple responded on Tuesday night that it opposes to the French bill which "will result in state-sponsored piracy," according to Apple spokeswoman Natalie Kerris. "If this happens, legal music sales will plummet just when legitimate alternatives to piracy are winning over customers", she said.

Apple claims that the law would likely increase its sales of iPod music players. "iPod sales will likely increase as users freely upload their iPods with 'interoperable' music which cannot be adequately protected," Kerris said. "Free movies for iPods should not be far behind."

The draft law also sets penalties for hackers that range from fines of € 38 to € 150 for first-time offenders caught pirating music or movies for personal use to a three year jail term and a € 300,000 fine for ditributors of piracy softwares.

The original bill also included a download fee for legal P2P downloading that was rejected in early March by the National Assembly (see CDRinfo's previous article).

The proposed law was adopted by the National Assembly with 286 votes in favor and 193 against and will be examined in the upper house, the Senate, a process expected to begin in May.

Under France's parliamentary procedure, the Senate debate should be the ultimate full reading of the new legislation. If the Senate passes any amendments, a committee of lawmakers from both houses will be convened to work out a compromise text, which must then be formally approved in two final votes by senators and deputies from the lower house.