Deutsche Post ruling to boost mail markets

Series Title
Series Details Vol 7, No.12, 22.3.01, p3
Publication Date 22/03/2001
Content Type

Date: 22/03/01

DEUTSCHE Post's adversaries are calling on the European Commission to use this week's anti-trust ruling as a battering ram to force open mail markets across the Union.

The German postal giant was fined €24 million for offering illegal loyalty discounts to mail order firms. It was also required to separate its business parcels unit to guard against cross subsidisation from the firm's state-sanctioned letters monopoly.

But critics of the company, including US operator United Parcel Service, which sparked the Commission's seven-year probe, want the ruling to serve as a warning to monopoly post offices across the Union.

"I don't think this week's decision was tough," said Anton Van der Lande, EU affairs director for UPS, "but it has far-reaching implications. The Commission confirms that there can't be cross subsidisation between a monopoly and a commercial activity, that is the bottom line."

Van der Lande argued that the ruling immediately calls into question the subsidies given by the French and British post offices to their respective parcel units.

Meanwhile Hubert Linssen, head of the EU office of the International Road Transport Union said there should now be an "explicit rejection" of cross subsidies in transport chief Loyola de Palacio's White Paper on transport policy, due this spring.

In its ruling the Commission said Deutsche Post's parcel business was allowed to use services offered by the letters division at prices that were below cost. This enabled the parcels business to undercut rivals that did not have access to the German post giant's network.

Monti agreed to Deutsche Post's offer to form a legally separate unit, which would now be charged full market prices for any services it buys from its sister company. It also pledged to offer rival parcel firms the same prices in a move to bolster competition.

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