EU fines Deutsche Post 24 mln eurs, orders parcel services split
The European Commission announced Tuesday
that it has found Deutsche Post AG guilty of having abused its dominant
market position in Germany "by granting fidelity rebates and engaging in
predatory pricing in the market for business parcel services." As a result,
the commission said that Deutsche Post is to create a separate legal entity
for its business parcel services. In addition, the EU executive body said
that it has imposed a fine of 24 million euros on Deutsche Post.
* * * The commission also said that the separation of Deutsche Post's
business parcel services will ensure that the German postal operator's
"revenues from the monopoly in the letter market will not be used to
finance" its business parcel services.
Commenting on the EU competition authority's first antitrust decision in the
postal sector, competition commissioner Mario Monti said that today's
decision achieves "a forward-looking result, in the form of Deutsche Post's
commitments in the parcel delivery market, which are of great importance to
the development of electronic commerce." The commission's decision sets a
precedent as "any service provided by the beneficiary of a monopoly in open
competition, has to cover at least the additional or incremental cost
incurred in branching out into the competitive sector," the commission said
in a statement.
FIDELITY REBATES FORECLOSE COMPETITION The commission decision is also a
clear condemnation of Deutsche Post's scheme of fidelity rebates in mail
order parcel delivery. The commission stated that "such a system of fidelity
rebates forecloses competition," and justifies the 24 million-euro fine.
The commission announced the start of formal action against Deutsche Post
for alleged abuse of its dominant position in the German market in August
2000.
The commission had said it was eyeing the company's pricing of parcel
delivery services for mail-order business.
At the time, the commission said its "preliminary enquiry suggests that
Deutsche Post allows large mail-order traders substantial discounts if they
undertake to send all their parcels through Deutsche Post."
NO PRIVATE PROVIDER COULD ACHIEVE FIRM FOOTHOLD It added that its
investigations also suggested that Deutsche Post "does not come anywhere
near covering the costs of its mail-order parcel services.
This means that no private provider of parcel services to mail-order firms
has been able to achieve any firm foothold in Germany." More recently, in
October 2000, the commission widened the scope of its formal proceedings
against the German postal operator.
It stated that Deutsche Post's contracts with its major mail-order customers
"contain a combination of fidelity and target rebates. According to these
rebate schemes large mail-order customers are granted discounts on the
double condition of them sending all their parcels and an annual minimum
volume through Deutsche Post AG." The commission is also investigating the
German company's "frequent and systematic interception, surcharging and
delay of normal incoming cross-border mail (which) infringes the competition
rules," of the EU.
In addition, the commission is also investigating a state-aid case granted
to the German company. An EU spokesman said that the commission's decision
might have consequences on the state aid case that is still being
investigated.
He said the investigation might become outdated in the light of today's
decision. End [Begin BridgeLinks] Julien Ponthus, BridgeNews, Tel
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BRIDGENEWS GLOBAL MARKETS, 20th March 2001
