Italy's antitrust authority fines Poste Italiane €40m

Poste Italiane has been fined EUR 39.4m by national competition authorities for abusing its dominant position in the Italian postal market. The Antitrust Authority said yesterday that the state-owned Italian postal service had been “hindering the development of liberalised markets” by acting to exclude and undercut rival delivery companies.

It has ordered an immediate halt to any abusive practices.

The fine of EUR 39,377,489 followed an investigation launched in October 2009, prompted by complaints from the Dutch mail and logistics giant TNT.

After a hearing held on Wednesday, the Rome-based Authority said that since 2007, Poste Italiane had used its reserved area of monopoly-protected postal services to undercut its rivals in the time-definite delivery market up to the end of December 2010, when full market liberalisation began.

The state-owned postal service was offering “predatory” below-cost pricing for its competitive products in order to head off private sector competition, subsidised by its universal service activities.

In the case of TNT Post, which had a turnover of about EUR 114m in Italy during 2010, the Authority said the Italian postal service had acted to undermine the “huge investment” made by TNT Post Italia in setting up an alternative network for date- and time-definite deliveries.

One tactic used by Poste Italiane was to set up a system in which any mail from a rival mail service that found its way into the Poste Italiane network would be returned to the sender, rather than passed over to the rival mail company. The sender would be then asked to pay full price postage to get hold of the original mail, or the item would be destroyed after a 10-day period, the Authority said.

Launching into the competitive market for value-added services, the Authority said Poste Italiane had adopted predatory pricing strategies and offered special service discounts to poach its rivals’ customers, which put the services below cost.

Poste Italiane won business from the Municipality of Milan and financial services company Equitalia by offering terms and conditions that were forbidden in 2008, the Authority said.

As well as ordering a halt to the abuse of Poste Italiane’s market position, the Authority said the Italian postal service must submit a report within three months detailing measures taken to stop the behaviour.