European antitrust regulators have begun investigating artist royalty agencies in Europe over their arrangements for digital music royalty payments.

Regulators expressed concern that the way such agencies work along strictly territorial lines may violate "rules on restrictive business practices" and give them monopoly powers, AP reports.

They will examine existing rules that mean authors can only use their locally-based royalty agency to collect their dues, and which means online music services such as iTunes must arrange a deal to distribute songs in each country they operate in.

This is thought to potentially limit the growth of the digital music industry.

Royalty collectors have two months to respond. They will be fined if they are found guilty of breaking EU competition law.