It would no longer be illegal to crack digital rights management -- the codes that protect music, films and other content -- if it is to enable to the conversion from one format to another, said Christian Vanneste, Rapporteur, a senior parliamentarian who helps guide law in France.
Music downloaded from Apple's iTunes online music store currently can only be played on iPods.
The law, if enacted, could prompt Apple to shut its iTunes store in France, some industry observers say, to keep from making songs vulnerable to conversion outside France, too.
The law would also mean that other online French music retailers such as Fnac, part of PPR , would have to make iTunes songs available on their Web sites.
Vanneste said the draft law aimed to fight piracy, encourage the development of the online digital music market in France and benefit legal online music retailers.
Under the latest version of the proposed law, people who download material illegally would be subject to a fine of 38 euros and those sharing illegally downloaded material with others would be subject to a fine of 150 euros.
People who make and sell software for illegal file-sharing and content downloading would remain subject to a maximum fine of 300,000 euros and prison sentences of up to three years.
Police agents can monitor music exchange Web sites and trace back the email address of beneficiaries by asking the Internet service provider for it through a court order.
The proposed law would also secure private copies of legally downloaded material, but the number of private copies could be limited and have yet to be determined. DVDs are expected to be excluded from the law, Vanneste said.
The new legislation is triggered by France's need to transpose the European directive on copyrights into its own body of law, which it failed to do by the December 2002 deadline.
Vanneste said France and Spain were the only two EU countries which had yet to make the move.
An earlier amendment that would have legalized the use of peer-to-peer networks to download songs and films for a flat monthly fee of several euros has been shelved, Vanneste said.
That proposal was fiercely opposed by music artists, film production houses and record companies.
Some legalized versions of peer-to-peer networks are starting to crop up, however, including one expected to be launched in Germany by Warner Bros, part of Time Warner Inc .