Gates went on to say Digital Rights Management "causes too much pain for legitimate buyers" trying to distinguish between legal and illegal uses. He declined to elaborate on how Microsoft would address this.

Gates' comments come as major record labels experiment with selling MP3s online without copyright protection. EMI is the latest to start selling MP3s without Digital Rights Management, with Britain's EMI Music offering tracks from singer Norah Jones and rock band Relient K - via Yahoo!'s online music service.

DRM-less music downloads are also a significant threat to Apple. Music sold with non-iTunes DRM, such as PlaysForSure or the new Zune format, can't be copied to an iPod unless the DRM is stripped. An unprotected MP3 can be imported into iTunes and copied to an iPod, creating competition for Apple's iTunes store.{moscomment}