UPS: European Commission’s Decision on Deutsche Post State Aid Victory for Fair Competition
United Parcel Service (UPS) commends the European Commission on its decision today that Deutsche Post AG (DPAG) must repay 572 million euros plus interest for receiving state aid and using monopoly profits to subsidize its commercial activities, notably its parcel service.
“This decision is a victory for fair competition and customer choice,” said Anton van der Lande, Vice President, UPS Public Affairs International. “Receiving state aid gives an unfair competitive advantage to Deutsche Post and distorts the market. We expect the necessary controls to be implemented to prevent further illegal state aid for Deutsche Post or any other postal operator.”
This decision complements the European Commission’s March 2001 ruling against Deutsche Post on abuse of a dominant position through granting loyal-customer discounts and for selling at a loss on the commercial parcels delivery services market, which resulted in a 24 million euros fine. Both decisions highlight the need for a clear separation of commercial and non-commercial activities of the postal service.
“Today’s courageous decision also sets a clear precedent for other postal operators who have embarked on a strategy of international acquisitions,” continues Mr. van der Lande. “We look to the European Commission’s decision regarding implementation of the decision and how DPAG will structure the repayment,” he continued.
The original state aid complaint, which has lead to today’s decision, was based on DPAG’s commercial practices in the domestic German parcel market. However, UPS calls for the principles of the ruling to also apply to Deutsche Post’s international commercial activities and its recently acquired express and logistics subsidiaries, including DHL.
In a related matter, UPS will file the EC decision with the U.S. Department of Transportation (DOT) as part of the DOT’s ongoing review of the relationship between Deutsche Post and DHL Airways.
Headquartered in Atlanta, Ga., UPS is the world’s largest express carrier and package delivery company, serving more than 200 countries and territories worldwide. In 2001, the company reported annual revenues of $30.6 billion on an average volume of 13.6 million packages and documents per day. UPS was chosen for the fourth consecutive time in 2002 as “The World’s Most Admired Company in the Mail, Package and Freight Industry” in a Fortune magazine survey. For more information, visit UPS on the Web at www.ups.com.
