The European commission has begun an investigation into whether the world's biggest record companies are abusing their dominant position to carve up the market for internet music sales.
Mario Monti, the EU competition commissioner, yesterday disclosed that he is scrutinising Sony and Vivendi Universal's online music venture, Duet, as well as the rival MusicNet service run by Warner Music, Bertelsmann and EMI of Britain.
"These are important cases for the development of music services offered online to consumers and there are potentially a number of issues which merit close examination," Mr Monti said.
"The consumer interest is clear: yes, online music services should develop rapidly, but with a diversity of service providers."
The world's big five record firms are determined to take advantage of the latent consumer demand highlighted by the maverick internet song-swapping service, Napster. There is one crucial difference - they want to make customers pay for the privilege of downloading their favourite song on the internet.
Brussels is worried that small independent music la bels will be edged out of the potentially multi-million pound market and wants to ensure that their interests are protected.
Officials confirmed yesterday that Mr Monti has already received a detailed list of potential concerns from Impala, a lobby group representing independent labels, although no official complaints about the ventures online by the big five have been lodged with the commission.
"The music industry is highly concentrated with just five major players and whenever they cooperate it is always a cause for concern although that doesn't mean they can never cooperate," a senior EU source told the Guardian.
"This is about being vigilant. We must make sure that the market is not developed in a way that would be to the detriment of the consumer.
"We recognise at the same time that the music industry is facing some real technological challenges and needs to adapt."
The stakes are high. At the height of its popularity almost three billion songs a month were being downloaded on Napster, which has been forced to shut down its free song-swapping service after legal action by record companies in the United States.
