Premiership Rugby chief executive Mark McCafferty has rejected claims from a Member of Parliament that the league operates like a cartel.
Gareth Thomas, the MP for Harrow West, has written to the Office Of Fair Trading with a request for the Competition Commission to investigate Premiership Rugby's funding structure.
Thomas claimed that Premiership Rugby distributes money with a "clear bias" against newly-promoted clubs, because they receive less money than established top flight teams.
"There is a clear bias in how funding is distributed against teams promoted to the Premiership. The funding arrangements have all the appearance of a cartel," Thomas said.
"They make it extremely difficult for newly promoted teams to survive or thrive.
"The Premiership should surely be a genuine competition in which clubs battle it out on a level playing field.
"It is time that the funding of Premiership Rugby clubs became much more transparent and that newly promoted teams received appropriate funding.
"I hope that the Competition Commission will investigate the funding of Premiership Rugby teams."
But McCafferty denied that he operates a cartel.
"I would reject that," he told Press Association Sport.
"We need to emphasise that we have promotion and relegation enshrined in our system and so people have access to the top level in England.
"That is not true, for example, in the RaboDirect PRO12.
"That access is there and history has shown clubs can come through ans establish themselves.
"Premiership Rugby has been a success story and it has been a commercial success and everyone has shared in that."
Thomas claimed in his speech to the Commons that newly-promoted teams receive £1.4million compared to the £3.5million that goes to established Premiership clubs.
Premiership Rugby strongly disputed those figures, arguing that promoted teams only receive around £800,000 less than full shareholders.
If a newly-promoted side avoids the drop in their first season, the system allows them to purchase Premiership Rugby shares from a relegated club, as Exeter did from Leeds this season.
The OFT will take between four and eight weeks to decide whether there is any merit in Thomas' request for investigation.
Asked whether he was confident the league's funding structure would stand up to an OFT investigation, McCafferty said: "If you did that you would have to look at all sports.
"Premier League football doesn't have equal funding for all clubs.
"Rugby League doesn't have promotion and relegation (every season).
"People need to look at it in the round. Sport needs to organise itself in a way that is reasonable and fair to achieve objectives to grow the game.
"People will have issues at any point in time about individual things."