The case revolves around a type of diesel vehicle produced by FCA, an Italian-US company, which the German transport ministry said contained illegal software that made the auto appear cleaner in the official test than it was in actual road use - a so-called defeat device.
FCA's troubles began last November, when US owners of Ram diesel pickups from model years 2007 to 2014 filed suit, claiming that their trucks were equipped with defeat devices like the ones found on more than 11 million Volkswagen vehicles.
The European regulator has already started investigations into seven other countries, including Germany, for failure to punish Volkswagen for its diesel emissions scandal adequately.
FCA shares fell 1 per cent to $10.44 in midday trading.
The vehicles engines were manufactured by VM Motori SpA, a subsidiary of FCA, and some component parts for the engines were supplied by Robert Bosch GmbH.
Back in March, FCA's CEO, Sergio Marchionne, warned investors that the company could soon face a Volkswagen-esque Dieselgate crisis of its own.
In February, Reuters reports, FCA revealed that it had received subpoenas from federal and state authorities related to information about the diesel emission issue. The fall follows reports that the United States Justice Department intends to file a civil lawsuit against FCA over excess diesel emissions if it fails to reach an agreement with the carmaker.
FCA said on Wednesday it believed any litigation would be "counterproductive" to ongoing discussions with the EPA and California.
The company added that "in the case of any litigation, FCA US will defend itself vigorously, particularly against any claims that the company deliberately installed defeat devices to cheat USA emissions tests".
The EU's executive arm "decided today to send a letter of formal notice asking Italy to respond to concerns about insufficient action taken regarding the emission control strategies employed by Fiat Chrysler Automobile Group (FCA)", s statement said.
The European Union is suing Italy for failing to ensure emission devices Fiat Chrysler fitted in its vehicles didn't allow cheating on pollution tests, Reuters quotes EU sources.