The European Commission has set out formal antitrust charges against Peugeot, accusing the French carmaker of restricting competition and exerting undue pressure on its dealers.
The case, which could lead to heavy fines, follows two raids on the company's offices in 1999 and 2003. It also comes after a string of similar investigations against European car companies, underlining the Commission's determination to loosen the grip carmakers have on dealers.
The campaign reflects concerns that car buyers have not yet been able to reap the full benefits of the single European market. Brussels points out that car prices still differ from country to country, often by over 20 per cent. The Commission blames this in part on efforts by manufacturers to prevent cross-border competition.
Peugeot is accused of breaking EU law by refusing to pay bonuses to dealers in Germany and the Netherlands in cases where cars were sold to foreigners or consumers outside their district.
Commission officials said such bonuses normally accounted for a large share of the profit a dealer made on a sale. This meant Peugeot had severely limited the scope for consumers to exploit price differences.
One official added that the alleged abuse had lasted between 1997 and 2003 in the Netherlands. In Germany, the company apparently changed its policy in 2001, though the abuse is believed to have started earlier than in the Netherlands.
Peugeot was informed of the charges some months ago, and a company official said the carmaker was not expecting a fine: "We have always respected EU anti-trust laws. We are very calm."
If found guilty, Peugeot could be fined a sum worth up to 10 per cent of its annual turnover, however it's rare for the Commission to order the maximum fine. Similar cases against Volkswagen, DaimlerChrysler and the General Motors' subsidiary Opel have resulted in penalties of between €35m and €90m.
The Commission is also investigating possible antitrust abuses by German carmakers Audi and BMW.
Audi is facing allegations that it restricts dealers' ability to trade cars among themselves, thereby increasing their dependence on the company.
BMW is fighting accusations that it has restricted its dealers' rights to sell different brands within the same showroom. Neither company has yet been formally charged.