The law obliges a range of e-commerce sites, video and music services and webmail providers to keep a host of data on customers. This includes users’ full names, postal addresses, telephone numbers and passwords. The data must be handed over to the authorities if demanded.
BoingBoing France to require unhashed password storage
No mention of requiring passwords to be unhashed, just stored and the information persisted. While this is still an interesting privacy problem it’s not the severe security issue it was made out to be.