Deutsche Post ordered to adjust postal rates for bills

German regulators have ordered Deutsche Post to stop allowing major customers to send bills and statements at lower cost rates allowed for advertising mail. The ruling came following an investigation launched in March into claims that Deutsche Post was offering unlawfully low rates for major customers of its Infopost unit.

The Federal Network Agency has now ruled that Deutsche Post must modify its terms of service to prevent bills being sent as advertising mail from 31 December, 2012.

But, the Agency will allow loyalty card statements to be sent under the lower advertising mail rate, ruling that since loyalty card programmes are essentially just a marketing tool, updates on consumers’ loyalty card accounts are “primarily advertising”.

Earlier this year, the regulators had received a growing number of complaints that Deutsche Post had been undercutting rivals unfairly by sending transactional mail through delivery services priced for direct mail.

Deutsche Post said at the time that the regulators had fully approved the terms and conditions of its Infopost bulk mail services back in the 1990s, but the Agency said in March it wanted to look at the boundaries between different categories of mail at the unit.

The Agency has now come back to state that even if a bill is the same for all recipients, rather than a customer-specific invoice, it is still a bill and cannot therefore be classified as direct mail.

“No longer justifiable”

As the former state-owned monopoly player in the market, the regulators said it was “no longer justifiable” for Deutsche Post to deliver statements at below-cost direct mail rates now that the German postal market is fully open to competition.

The regulators allow advertising mail to be delivered at low cost because they believe the postal sector faces “enormous competitive pressure” from other advertising channels, particularly electronic media.

Germany’s postal, courier and express industry federation, the BdKEP, welcomed the decision of the Federal Network Agency as “another milestone for fair competition in the postal market”.

The membership association said the regulator’s ruling also prevented Deutsche Post from delivering newsletters on direct mail rates.

Manfred Lein, managing director of BdKEP, said: “This clarification will allow the new postal companies more leeway to compete with Deutsche Post. However, it is likely that this decision will be accelerated by the digital transmission of bills that is now recognised by the Tax Office.”

The BdKEP said Deutsche Post’s rivals were not liable to the same restrictions on pricing bills and statements, since they were not dominant in the postal market.

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