EU Reportedly Ready To Fine German Post Office

Germany’s publicly controlled postal system, Deutsche Post, is facing by next month or June at the latest a new multimillion-euro fine by the European Union over its continuing subsidies to its money-losing package delivery service, officials here said on Sunday.

The officials, close to the EU’s competition commissioner, Mario Monti, said Deutsche Post was continuing to violate EU competition policy by using revenues from its monopoly on most first-class letters to keep the package service afloat and undercut private-sector competitors. The officials said Mr. Monti had falsely concluded that Deutsche Post was responding to EU concerns after talks with top managers of the postal service, a publicly traded company in which the German government still controls a majority of the shares.

Those talks came after the EU twice upheld complaints of unfair competition against Deutsche Post by private-sector package delivery companies. In one of the cases, Deutsche Post was fined euro 27 million ($24.3 million) last year and ordered to separate its package delivery service from its standard postal operation following a complaint by U.S.-based UPS.