France Télécom fell under the European Commission's antitrust spotlight earlier this week when Vivendi, the owner of rival telecommunications operator SFR, filed a formal complaint about the way the former French public monopoly competes.
"We received the complaint alleging abuse of a dominant position and we are looking into it," said Jonathan Todd, the Commission's spokesman on antitrust matters.
He added that the antitrust department may open a formal investigation of France Télécom as a result of Vivendi's allegations.
Vivendi claims that France Télécom has been abusing its powerful position in the wholesale market for local loop network access to the detriment of rivals by overcharging them for use of this vital portion of France's telecommunications infrastructure.
If true, this would put rivals at a competitive disadvantage to France Télécom itself because it would make it harder for them to offer retail services as cheaply as the incumbent.
Vivendi owns a majority stake in SFR, best known for its mobile phone network but also one of France Télécom's rivals in the French broadband market following the recent acquisition of Neuf Telecom.
Last month SFR and Canal Plus, another Vivendi subsidiary, complained to the French competition authority about France Télécom's behavior in the market for broadband pay-TV services.
There is no time frame for European antitrust inquiries.