Indie record labels say they will lodge a formal competition complaint with the European Commission over Google-owned YouTube's alleged bully-boy tactics.
The move comes as Google prepares to launch a Spotify-like streaming service using the YouTube brand. Last month, the indie labels' trade associations complained the advertising giant was using strong-arm tactics to force the smaller labels to sign terms for the new service – terms far inferior to those offered to the Big Three labels.
Specifically, the indie groups WIN, IMPALA and AIM alleged YouTube threatened to pull indie music videos from its website if the labels refused to knuckle under.
If the indies can stand up those allegations, then Google faces some serious trouble in Brussels, where the web giant is not exactly flavour of the month.
AIM represents the interests of indie labels in the UK and the US; WIN is a global umbrella group; and IMPALA conducts policy work for indie music in Brussels. The associations set up the licensing agency Merlin seven years ago, which negotiates collectively on behalf of hundreds of indie labels. YouTube chose to bypass it, and approached individual labels with template contracts, independent music sources say.
In a joint statement, the three associations confirmed they are "seeking formal regulatory action and will look to the European Commission (EC) for emergency assistance", adding:
IMPALA, the European independents association, will be spearheading a complaint with the EC. The complaint will include a request for urgent intervention to stop YouTube carrying out any blocking measures or issuing new threats. Regulatory action is seen as an essential safeguard against abusive conduct and to promote real competition and diversity in the digital music market.
"YouTube is behaving like a dinosaur, attempting to censor what it doesn’t like," said Helen Smith, executive chairwoman of IMPALA.
YouTube's existing video service dominates the streaming music market, and is vital to music discovery – so removal could result in a loss of exposure for artists on small labels.
Our sources suggest that while the major labels were offered significant advances, the indies weren't – and were given a take-it-or-leave-it streaming rate far below the Spotify rate.
Google will want to avoid a long-drawn out legal process that delays the launch of YouTube Music and shines a spotlight on the murky world of digital music contracts.
A press conference is being held today at 1500 BST. More details to follow. ®