With Amazon having just launched its Cloud Drive digital locker product and Apple rumored to be on the verge of introducing a cloud-based music service of its own, the last thing Google needs is a new barrier in its negotiations with music labels. Unfortunately, according to a new report on Friday, Google has positioned a new hurdle in its own path by changing the terms of its proposed Google Music service in the middle of talks with labels. As a result, Google’s conversations with major labels have now “gone backwards,” and Google may be thinking about throwing in the towel and launching an Amazon-like locker service where users can upload their own songs and stream them. This would be less than optimal for Google as it would likely pull in far less revenue than a subscription music service or an iTunes-like store, but at least it would give users a way to stream their music on any PC or Android device.

[Via MediaMemo]