French download site Virginmega.fr wanted to force Apple to lift the lid on its digital rights management (DRM) technology in order to allow Virgin to make its downloads compatible with the iPod music player.
Apple has refused to open up its proprietary Fairplay technology -- the DRM system that allows songs from the iTunes store to be played only on iPods -- to competitors. Virginmega.fr has opted for Microsoft's DRM, which means its downloads can't be played on iPods at all.
Due to a lack of "sufficiently convincing elements," the council said it rejected Virgin's case and call for action. Its members noted that "access to the Fairplay DRM isn't indispensable to the development of legal platforms for the downloading of online music." According to them, the market is "in rapid expansion...and very dynamic in France as well as in other European countries and the US."
The council, however, noted that lack of interoperability between different download sites and music players is "a disadvantage for consumers," but added that "situations like this recur in sectors linked to information technology" and aren't necessarily affected by competition law.
Furthermore, the council emphasised that the link in causality between Apple's "possibly dominant position in the hard disk music player market and the competition situation with regard to the download market isn't established."
The council said that various music player devices that are compatible with Virginmega.fr's platform are available on the French market. It added that players with a hard disk, like the iPod, "are and will remain dominant for a long time" over players with Flash memory.
Virgin and Apple declined to comment.
Estelle Dumout of ZDNet France reported from Paris.