"The Commission proceedings focus on behavior which may prevent or reduce competition on supply markets for natural gas in France, "the European Union (EU)'s antitrust watchdog said in a statement.

Based on inspections carried out in 2006 on Gaz de France premises in France by EU inspectors, the Commission accused the French utility of anticompetitive behavior, in particular, through a combination of long-term reservation of transport capacity and a network of import agreements, as well as through under investment inimport infrastructure capacity.

However, the Commission said the initiation of proceedings did not imply it had proof of an infringement, but only signified that there would be an in-depth investigation of the case.

"We found information during the course of those investigations which illustrated that there was deliberate under investment so there would be no increase in gas imports onto the French market,' 'Commission spokesman Jonathan Todd told reporters at a daily briefing.

"Where there is a deliberate policy of not investing, the recould be an issue of the abuse of the dominant position on the market," he added.

Gaz de France said it has substantially increased investment in infrastructure in recent years to 1.5 billion euros (US$2.37 billion) last year, but it vowed to fully cooperate with the European Commission in the probe.

If found guilty, the company could be fined up to 10 percent of its annual turnover.