Thank you for bringing your question to Just Answer!
Your niece is lucky to have a concerned aunt like you. This is a dangerous situation, and you are right to be concerned. You might ask your daughter to get your niece to look online at some quizzes that will help her see that this is abuse. Here are a few:
This one is a pamphlet: http://www.safehorizon.org/images/uploads/misc/1297797123_10%20signs%20that%20you%20may%20be%20experiencing%20relationship%20abuse.pdf
Abuse tends to escalate over time. This situation will not fix itself, especially with the boy and his parents in denial.
I know that this is not what you want to hear, but as a therapist it is my responsibility to be as honest as possible with you and tell you that
you and your daughter (since she is the one with the most information) must tell her parents, even though you worry about how her father will react. If something drastic happens to her, the family will be angry to find out that you knew but didn't tell them. You would also end up carrying a lot of guilt if she ends up getting seriously hurt. And she needs to know that people care enough about her to do the right thing for her...if she REALLY didn't want anyone to know, she wouldn't have told your daughter. She would have found someone outside of the family to tell. She may not be able to admit that she needs help, but she does.
She is only 19, and still needs some guidance from her parents. And yes, she will be angry with you and your daughter, but this is one situation where hurt feelings have to take second place to the possibility of her getting hurt physically.
I don't think anything good can come of NOT telling her parents, and you may be able to help save her from this abuse. She would also benefit from therapy to help find out why her self-esteem is so low that she will accept abusive treatment from others.
This is one secret that should not be kept. You and your daughter need to tell her parents what she has told you.
I know it's hard, but it's the right thing to do.