MySpace Music Faces Threats Of Antitrust Suits From Indie Labels Before Its Launch

Indies claim they're being blocked from uploading music to the site.

The very online service that has been such a boon for independent music artists is now facing criticism for allegedly freezing those same artists out of the picture with its new music venture. MySpace Music is drawing fire for its deal with major labels and threats of a possible antitrust action that could scuttle the venture before it even opens shop, according to a report in the British tech journal The Register.

The trouble is over the deal cut between MySpace parent company News Corp. and three of the four major music labels that control 70 percent of the U.S. recorded music business. The site, which has not yet announced a launch date and is still reportedly without a CEO, will offer unlimited free streams, DRM-free downloads (some free and some for a fee), ringtones, concert tickets and merchandise, most of it underwritten by four title sponsors announced earlier this week: McDonald's, Sony Pictures, Toyota and State Farm. The site has already drawn a projected valuation of $2 billion based on the MySpace cred and the high-profile partners.

But it is the partnership with Sony BMG, Universal and Warner Music Group that has independent labels saying they feel like they've been frozen out, according to The Register. No indie record company has inked a deal with MySpace Music. According to the report, the site does have a service that allows indie labels to upload their own music, but some unnamed labels have reported that they've been blocked from uploading their catalogs.

The issue could be a simple rights-management snafu — a complication that results from major labels sometimes owning the rights to an indie's music in a particular territory in the world. But at least one label, Impala, has asked European regulators to look into any possible antitrust issues with the service, suggesting that the majors and News Corp. are attempting to block the indies' access to the MySpace audience.

Though it's unclear what impact a potential antitrust case in Europe might have on the U.S. market, independent labels have successfully challenged big mergers in Europe twice in the past 10 years, scuttling the Sony/BMG union in 2006 and the Warner/EMI one several years earlier.

A spokesperson for MySpace could not be reached for comment at press time.