France's proposed law would allow anyone to request information about DRM systems in order to make encrypted files interoperable with other devices. This would enable users to legally play music purchased from the iTunes Music Store on devices other than the iPod, such as Creative's Zen MP3 players. While Apple seems to fear that the move would also push users to illegally exchange music files, it's difficult to say whether this would increase piracy at all. After all, users have been able to exchange MP3s ripped from legally-owned music CDs for years.
Yesterday, Gene Munster, an analyst for Piper, claimed that Apple would likely pull out of the French market altogether rather than risk "what could be a slippery slope of other countries passing similar legislation." According to Munster, only 20% of iPod and iTunes sales are made outside the United States, and only 2% of those happen in France. Apple's potential pullout would therefore "not materially impact business."