The proceedings were initiated by the EU's executive body following more than two years of investigations with the German-US car maker accused of preventing its exclusive dealer networks in Germany, Belgium, the Netherlands and Spain from selling Mercedes cars to non-residents of those countries.

According to a European Commission spokesman on competition issues, the car maker is also accused of fixing the price of its cars for sale to fleets, such as corporate car pools and taxi firms.

``The company appears to have been restricting dealers from setting prices and conditions on sales to fleets,'' the spokesman said adding that this alleged price fixing only took place in Germany.

There was no immediate reaction from officials of Daimler Chrysler. Daimler Chrysler's alleged infringements of EU competition law tookplace between 1985 and 1996, well before the take-over of Chrysler by Daimler Benz in 1998. The Commission became aware of this after receiving complaints from individual consumers, the spokesman said.

``We think we have sufficient evidence to indicate that competition rules might have been infringed,'' he added. The car maker, if found in breach of competition rules, could face fines of a maximum of 10 per cent of its world-wide sales in the year preceding the decision. The company posted sales of about $140 billion in 1998. Most anti-trust cases have in the past resulted in smaller penalties with the spokesman saying that the German car maker Volkswagen was fined about $115 million at the beginning of last year for alleged offences, which was just 0.4 per cent of its annual revenue.