EU's Kroes says E.ON, GDF breaches were "serious"

* Kroes cites "serious" misbehaviour

* Final anti-trust decision seen in days

* Lawyers say fine could be substantial, not huge

By Love Liman and Foo Yun Chee

STOCKHOLM/BRUSSELS, July 1 (Reuters) - EU antitrust chief Neelie Kroes on Wednesday accused German utility E.ON EONG.DE and Gaz de France of serious misconduct in allegedly carving up gas markets, days before she is expected to rule on the case.

The two companies face possible fines if found by Kroes to have violated EU anti-cartel rules.

The comments were among her clearest public statements on the case since the European Commission announced charges against the two firms last year.

"It was a misbehaviour. A serious one," Kroes, the EU Competition Commissioner, said at an EU event in Stockholm, when asked by Reuters about the matter.

The Commission's case against E.ON and GDF was launched after raids on the two and centres on their jointly-owned MEGAL pipeline from southern Germany to the French-German border.

E.ON said the alleged anti-competitive practices were linked to agreements that expired in 2004 and that the business had been competitive for years. Gas supplier Gaz de France merged with Suez last July to become the GDF Suez (GSZ.PA) group.

Michael Reynolds at law firm Allen & Overy estimated any fine could amount to around 500 million euros ($703.5 million).

"This is not a Microsoft or Intel case, resulting from many years' investigation, but the fine could still be substantial," he said of earlier anti-trust cases by the Commission against U.S. technology companies that resulted in larger fines.

Other experts said it was not certain the companies would face a substantial fine as the violation pre-dated Commission efforts to unbundle the energy market.

"There will be a fine but it remains to be seen whether it will really be huge," said Luc Gyselen at Arnold & Porter, noting recent Commission settlements with E.ON and German energy company RWE (RWEG.DE).

E.ON last year settled separate EU antitrust charges by agreeing to sell its power grid and some generation plants. RWE agreed to dispose of its gas transmission network to settle another antitrust case. (Writing by Foo Yun Chee; editing by Mark John and David Cowell)