Notice on rules for postal competition suffers delay in delivery

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Series Details Vol 3, No 27 (10.07.97)
Publication Date 10/07/1997
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Controversial notice setting out how EU competition rules should apply to postal operators has been delayed to avoid antagonising the European Parliament.

The declaration, which the Competition Commissioner Karel van Miert had promised to publish by the end of last year, is now due for release in late September.

Van Miert originally claimed the notice could not be published before a market-opening directive was formally agreed by ministers.

That directive would allow post offices to keep their monopolies on the transport, sorting and delivery of mail costing less than five times the standard postal rate and weighing less than 350 grams. Only after three years would ministers decide whether to open up the market for cross-border post and direct commercial mail or reduce the mail weight and tariff thresholds with effect from 2003.

But even after the directive was adopted by ministers, the draft notice remained bogged down because Commissioners could not agree how to prevent the cross-subsidising of competitive services, such as parcel delivery, with monopoly profits.

This problem has, however, been settled. The notice warns post offices not to cross-subsidise units which compete with the private sector with profits from standard letter post, unless this is justified by stated universal service obligations.

The directive was only acceptable to Parliament once it had been watered down and any attempts to tighten up the competition rules via the back door of the notice will be closely watched.

Last year, MEPs adopted a resolution calling for withdrawal of the notice and Brian Simpson, the British Socialist tasked with guiding the directive through Parliament, has taken a hard line against liberalisation.

The Parliament's economic affairs committee will vote next Monday (14 July) on whether to amend the directive to ban what could be a key profitable area for the private sector known as 'non-physical re-mail'. This occurs when, for example, a German bank transfers details electronically to the Netherlands, where bank statements are printed and then re-mailed to Germany. Private sector operators want this to be classed as straightforward cross-border high-value mail and not standard letter mail.

The directive will be considered by the full Parliament in September. Only then will the notice be published.

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