Peugeot blocked exports of new cars from the Netherlands, where vehicles are cheaper than in other European Union countries, preventing consumers from benefiting from the EU's single market, the commission said.
The Commission said PSA Peugeot had made "a very serious violation" between 1997 and 2003 of a European Union ban on restrictive business practices.
"This decision demonstrates the commission's determination to use the EC treaty's competition rules to prevent companies from depriving consumers of the benefits of the single market," the EU competition commissioner, Neelie Kroes, said.
The commission reproached Peugeot for a remuneration system that discouraged Dutch dealers from selling cars outside the country and for threatening to cut the number of cars available for showrooms carrying out a large number of foreign sales.
"This system had as its sole objective to boost Peugeot's market share in the Netherlands and in no way attempted to prevent sales across the border," Peugeot said. All clients outside the Netherlands wanting to buy Peugeot cars from the country had been supplied, it said.