IMPALA, the trade group of European indie labels, has finally filed a complaint with the European Commission against YouTube, which has been accused of engaging in antitrust conduct.
According to a press release issued by IMPALA, its complaint to the EU focuses on a series of alleged breaches of European competition rules, setting out five specific instances of conduct which the trade group claims are illegal, given YouTube’s position as a gatekeeper to the online market. IMPALA claims that YouTube is effectively creating artificial barriers to accessing the digital market. The highly publicized and controversial issue is not limited to Europe as IMPALA's counterpart in the U.S., A2IM, has likewise filed a complaint with the U.S. Federal Trade Commission.
Independent labels claim that YouTube's contract is unfair to independent labels and imposes onerous terms on that sector while offering more generous payment terms to major labels.
“The formal process has started in Brussels where the European Commission has consistently shown it will take a stance to ensure its competition rules are properly respected," IMPALA executive chair Helen Smith said in a statement. "This is a crucial moment for the development of the online music market with European services leading the charge . . . How does Europe want its artists and consumers to be treated? We look to Commissioner Almunia to take urgent action.”
IMPALA’s complaint asks the Commission to put a stop to YouTube’s conduct urgently through so-called "interim measures." The Commission has also requested to order that YouTube cannot enforce contracts already signed.
IMPALA noted that in addition stopping YouTube's conduct, the EC could also issue a fine of up to 10% of its turnover worldwide. "With advertising revenues alone reported to be $5.6 billion, YouTube could be facing a fine north of $500 million," according to IMPALA.
Google responded to Billboard's request for comment on the complaint with a statement: “Our goal is to continue making YouTube an amazing music experience, both as a global platform for fans and artists to connect, and as a revenue source for the music industry. We’re adding subscription-based features for music on YouTube with this in mind -- to bring our music partners new revenue streams in addition to the hundreds of millions of dollars YouTube already generates for them each year. We are excited that hundreds of major and independent labels are already partnering with us."