By AppleInsider Staff

Published: 09:00 PM EST (06:00 PM PST)

France has finally passed the controversial law that may force Apple to alter its digital media strategy in the country. Meanwhile, there has been some talk of a potential Apple product introduction next month. And Merrill Lynch does some digging on the company's stock grant situation.

French law passed

The French parliament on Friday adopted a law that could force Apple to rethink its digital music business model, and inspire other European governments to launch similar action against its closed system of iPod players and iTunes online music, reports the Financial Times.

The controversial law was reportedly "rushed through after a heated debate on the last day of the session." It maintains that all electronic devices should be "interoperable", so that consumers can play legally downloaded music on any type of digital player.

It's rumored that Apple, which has called the law "state-sponsored piracy," is more likely to pull out of the French market than it is to open its iPod+iTunes ecosystem to allow compatibility with rivals.

New Apple product rumors

There's recently been some talk about a potential Apple product introduction following the July 4th holiday. However, the rumors are largely unconfirmed at this time.

Specifically, the rumblings suggest a high-end hardware offering could be in the cards. Informed speculation would point to a product based on Intel's Woodcrest line of chips, which were recently introduced.

Other Apple rumors this week surrounded a house cleaning amongst the company's support discussion board moderation team and a quiet retail operation dubbed "blind date" aimed at generating increased sales.

Merrill on Apple's option grants issues

Meanwhile, Merrill Lynch analyst Richard Farmer did some investigating into Apple's stock grant irregularities. He found that, of the total number of options granted (adjusted for splits) to named executives, 5 percent were granted at a share price that was less than 5 percent from the fiscal year low.

The analyst also found that 9 percent of option grants were less
than 10 percent from the fiscal year low, but these appear to be a small percent of overall executive option grants.

"However, excluding options granted to Steve Jobs (which were priced at levels far above the fiscal year low), 15 percent of options were granted at a share price that was less than 5 percent from the fiscal year low and 24% of options were granted at a share price less than 10% from the fiscal year low," Farmer told his client. "Perhaps these are the grants that may have triggered the internal investigation."

Merrill Lynch maintains a "Neutral" rating on Apple share.