It says the most important aspect of the deal was an increase in the commission paid by sellers at auction.

Alfred Taubman was found guilty of conspiracy

But, it says, the collusive agreement concerned many other trading conditions, such as advances paid to sellers, guarantees given for auction results and payment conditions.

The European Commission says it believes the collusive behaviour found its origins at the most senior level, between the two chairmen, Alfred Taubman for Sotheby's and Christie's Anthony Tennant.

Right of reply

Sotheby's said the commission's statement was just the next step in an administrative investigation which had been going on for some time.

The company said it had co-operated fully with the commission throughout its investigation and would continue to do so.

The commission began its inquiry more than two years ago when Christie's approached both the United States Department of Justice and the European Commission with proof of a cartel between itself and Sotheby's

The two auction houses now have the right to answer the commission's objections and to request a formal hearing.

A New York jury has already found the former chairman of Sotheby's, Alfred Taubman, guilty of conspiring with his counterpart at Christie's to fix commissions on art sales.