Matthews was questioned by police on Tuesday over an alleged attack and placed under formal investigation by a magistrate, reported The Telegraph.
An official from Paris' judicial system confirmed the news of the 74-year-old's arrest.
The alleged rape is said to have happened in 1998-9 and was reported to police in 2017.
The publication also reported that the father of James Matthews, husband to the Pippa, quashed the charges as "untrue and scandalous."
It was further reported that he was released from the custody and was not directed to remain in the country.
Matthews was at the wedding of Pippa, the sister of Kate Middleton, and his son on May 20 of last year. He attended the nuptials with his wife Jane Parker, to whom he has been married since the 1970s.
Matthews is the son of a coal miner, but became a self-made millionaire, according to the E! Online. (ANI)