Regulators launch fresh probe into Deutsche Post pricing

Deutsche Post is facing more allegations of predatory pricing in its native Germany, with regulators now investigating its bulk advertising mail service Infopost. The Federal Network Agency confirmed yesterday that it has launched a review of the unit, which provides delivery services for large customers sending direct marketing, samples and catalogues.

The regulators said complaints had been “mounting” from the national postal operator’s rivals that Deutsche Post was undercutting its competition unfairly with subsidies from the rest of its business.

Under European competition laws, postal operators in a monopoly position in their national markets are not allowed to offer competitive services below cost in order to keep out rivals.

In this case, the Federal Network Agency said it appeared the boundaries between Deutsche Post’s different mail services were not entirely clear.

Allegations from rivals suggested that Deutsche Post was providing delivery for transactional mail like bills and statements, on behalf of its large customers, through the Infopost service, instead of only direct marketing mail.

It meant mail deliveries that should have cost at least a 34 cent price per piece were being delivered for “significantly cheaper”, according to the claims.

The agency is expecting to conclude its review by the end of April 2012.

“Cause for concern”

Matthias Kurth, president of the Federal Network Agency, said: “For us, these complaints are cause for concern that boundaries between Infopost and other services cannot be managed accurately. We will closely examine the allegations and suggested examples up to a logical cut-off date.

“This will best reviewed through a fully transparent, public process,” added Kurth.

Deutsche Post told Post&Parcel that the Federal Network Agency had already investigated and approved the terms and conditions for its bulk mail services back in the 1990s.

“Our terms and conditions for bulk-mail have been existing for many years. They are fully transparent for everyone and usable for every customer who meets the requirements of the conditions,” said company spokesman Dirk Klasen. “No customer has ever submitted a complaint and so we’ll see what the authority wants to conclude now.”