The European Court of First Instance ruled on Tuesday that the European Commission's 2001 fine against tyre maker Michelin of €19.76 million ($US16.87 million) is correct, Reuters said.

"The Court of First Instance upholds the Commission's decision to fine Michelin for practices which are unfair to its dealers," the court reportedly said.

Reuters said the Commission imposed the fine against Michelin for its tyre replacement practices for heavy vehicles in France during the 1990s.

The European Commission had ruled that Michelin "abused its dominant position" between 1990 and 1998 as its policies for retread and new replacement tyres had kept dealers in close interdependence and prevented them from choosing suppliers freely, the news agency added.

"Michelin's complex system of quantitative rebates, bonuses and other commercial practices illegally tied dealers and foreclosed the French market to other tyre manufacturers," the Commission said in its June 20, 2001 decision, according to Reuters.

The news agency said Michelin disagreed, arguing that the Commission's concept of "abuse of dominant position" used by the Commission had no equivalent in the United States or Japanese markets where its rivals are dominant.