French La Poste decision reversed
European Union regulators were wrong to allow the French state-run postal service to help a unit expand into express delivery in the 1980s and ’90s, an EU court ruled Wednesday in a case brought by FedEx and DHL International.
The regulators’ conclusion in 1997 that France did not provide illegal subsidies by allowing La Poste to grant logistical support to its Chronopost subsidiary was unjustified, the European Court of First Instance in Luxembourg ruled.
Industry groups have complained that former monopolies like La Poste have used government aid, which is intended to support nationwide letter delivery, to buy competitors in the express business.
The case at the Court of First Instance, the second-highest European court after the European Court of Justice, was brought by express mail carriers FedEx, DHL and Crie, as well as industry group Union Francaise de L’Express, or Ufex.
It was the second time that the case went before the Court of First Instance. The judges in December 2000 annulled the regulators’ decision, finding that the regulators had not applied a correct test. That ruling was successfully appealed by France, La Poste and Chronopost. The Court of Justice found in July 2003 that the Court of First Instance had committed an ”error of law” by applying the wrong state-aid test and the case was referred back.
”We will study it carefully,” a European Commission spokesman, Jonathan Todd, said of the latest ruling. He declined to comment further. The commission has two months to decide whether to appeal.
