It was only after the emissions scandal emerged last year that action was taken.
At a meeting on Tuesday, GUE/NGL group Vice-Chair Neoklis Sylikiotis questioned Commission representatives for the institution's "failure to take action" after a joint research centre (JRC) report raised the possibility of cheating in emissions tests back in 2013.
Commission representatives who appeared at the meeting in Parliament acknowledged the risks but argued there was "no concrete evidence" to justify action following the JRC report.
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Parliament's emission measurements in the automotive sector (EMIS) inquiry committee heard the testimony of four Commission representatives from the type-approval authorities expert group (TAAEG) and the technical committee on motor vehicles (TCMV).
Their testimony appears to contradict recent media claims that the Commission was warned by its own experts that a car maker was suspected of cheating emissions tests five years before the VW emissions scandal.
A documents cache seen by the Guardian newspaper show that the Commission's in-house science service told it in 2010 that tests had uncovered what researchers suspected to be a "defeat device" that could cheat emissions tests.
VW was caught by US authorities last year using defeat device software that detected if a car was being driven under lab test conditions, and adjusted itself to reduce emissions of harmful nitrogen oxide (NOx) pollution. Under real world conditions, the 11m VW cars affected had higher NOx emissions.
Tuesday's meeting was the first time that Commission representatives have provided testimony to the inquiry committee, which was set up by MEPs to probe the scandal.
The Commission had been criticised for its lack of cooperation with the committee's mandate.
Former European industry and entrepreneurship Commissioner Günter Verheugen refused to attend an earlier hearing.
EMIS requested access to further documents to be able to delve deeper into the emissions scandal but, according to Sylikiotis, the Commission is yet to release such information.
The Cypriot MEP said, "Even if we take at face value the Commission's claim that there was no concrete evidence that indicated cheating in emissions tests, the Commission should have launched an investigation to check whether the car manufacturers were using defeat devices based on the suspicions raised in the JRC's reports."
At the hearing, the Commission representatives contended that it was the member states' responsibility to check compliance with regulations, including compliance with emissions standards.
However, Sylikiotis emphasised that "monitoring the development of national policies and the enforcement of the EU legislation by national authorities is clearly in the European Commission's mandate."
Sylikiotis expressed concern that the scandal is "being contained and that the cheating may be widespread."
He also questioned the Commission on whether steps are being taken to confirm suspicions and other proactive measures to prevent future fraud.
He said, "The international council on clean transportation (ICCT) published the initial results of the diesel emissions screening campaign conducted by the French and the results give credence to suspicions that VW is not the only culprit and that the problem is more widespread and affects other car manufacturers."
Speaking separately, Belgian Socialist MEP Kathleen van Brempt, the Chair of the inquiry committee, said that the Guardian papers were "shocking" and raised questions about the future of Commission officials.
"These documents show that there has been an astonishing collective blindness to the defeat device issue in the European commission, as well as in other EU institutions."