Brussels - The European Union has launched an investigation into U.S. treatment of overseas online gambling operations, with an eye towards possibly launching proceedings against the U.S. at the World Trade Organization, Reuters reported. Several European online gaming services filed complaints with the EU in December, saying that the U.S. is singling out foreign companies for prosecution, while allowing domestic online gambling on horse racing.

The U.S. Department of Justice cracked down on overseas online gambling companies last year, arresting executives at several companies in a campaign that resulted in most foreign Web gambling services cutting off access to U.S. customers.

"The U.S. has the right to address legitimate public policy concerns relating to Internet gambling, but discrimination against EU companies cannot be part of the policy mix," EU Trade Commissioner Peter Mandelson said in a statement.

The U.S. and EU in December reached an agreement over the U.S. withdrawal of WTO commitments related to open online gambling markets, with the U.S. agreeing to open other areas as compensation.

U.S. trade officials told Reuters that they had been assured by the EU that its new investigation "will not upset the compensation package."

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