The EC is looking at whether Tennet has cut the level of transmission capacity between northern Germany and western Denmark.
"If proven, this behaviour may breach EU anti-trust rules, specifically on the abuse of a dominant market position... as it would amount to discrimination against non-German electricity producers and to a segmentation of the single market for energy," the EC said.
Commissioner Margrethe Vestager, in charge of competition policy, added: "Energy should flow freely in Europe so that the electricity produced by a wind turbine in one country can reach the consumers in another.
"Our investigation into Tennet is part of our efforts to ensure that electricity grid operators do not unjustifiably restrict the free flow of electricity between member states, to the detriment of European energy consumers.
"Ensuring that electricity interconnectors remain fully open to cross-border trade is essential to achieve our overall objective of an efficient, sustainable and competitive energy market," Vestager said.
Tennet has played down the investigation, saying it is working with the EC to develop "concrete solutions".
It argued: "Transmission capacities in Europe have... reached their limits during the course of market liberalisation and the energy transition."
"The commission is now examining, by way of example, the calculation methodology for the capacities allocated on the interconnections between Germany and west Denmark, which is currently applied at all borders with transmission bottlenecks in Europe," Tennet said in a statement.
"This involves whether the calculation of capacities approved under European law puts foreign providers at an unfair disadvantage."
"From Tennet's point of view, the competition procedure with market consultation offers an opportunity for a legally secure interim solution pending... the new regulatory framework for European electricity trading."