Billy Bragg is among figures calling for Europe's ruling bodies to step in to help independent labels get better terms for their artists in a proposed new streaming service being developed by YouTube.
An alliance of bodies representing smaller record firms and musicians themselves is asking the European Commission (EC) to step in with regulatory action to ensure they get a better deal.
The Worldwide Independent Network (Win) - representing companies globally - has teamed up with the Featured Artists Coalition (FAC) and Impala, an association of European independents, in an effort to get authorities to step in.
They say they have been offered "highly unfavourable terms" which are non-negotiable and claim they have been told content will be blocked on the new platform unless they sign.
Bragg is among those who are backing the efforts to strengthen their hand against the online video company, owned by Google.
"They're in danger of launching a streaming service that lacks the innovative and cutting-edge sounds that independent artists bring," he said.
Alison Wenham, chief executive of Win, said: "We will start this process in Europe with Impala referring YouTube to the EC for urgent regulatory action, which will be the first step in a global campaign."
Radiohead drummer Ed O'Brien, who co-chairs FAC, said: "Indie artists and labels are at the cutting edge of the future of music. To restrict them in this way is to risk creating an internet just for the superstars and big businesses."