The European Commission began formal proceedings against the FIA and Bernie Ecclestone's Formula One Administration on suspicion they breached EU competition rules.

In a statement released earlier today, acting EU competition commissioner Karel Van Miertthe EC says: "We have found evidence of serious infringements of European Union competition rules which could result in substantial fines. The Commission has now formally told the Federation Internationale de l'Automobile (FIA) that it considers the FIA to be abusing its dominant position and restricting competition."

The statement also refers specifically to the monopoly of Ecclestone in selling TV rights. "One of the Commission's most significant conclusions is that many of the contracts concerning the commercial exploitation of international motor sports were concluded on the basis of a situation unlawful under European Union competition law," the EU executive said. "Those contracts would therefore have to be renegotiated if the Commission's initial view is ultimately confirmed."

The EUC move comes just a few weeks after Ecclestone successfully sold $1.4 billion in bonds backed by commercial and broadcasting rights to key Motorsport events, but underwriters, which include Morgan Stanley Dean Witter and Westdeutsche Landesbank, said today that it was too soon to say how investors may be affected.