Deutsche Post wins challenge of Belgian La Poste aid

Deutsche Post has won a court ruling to annul the EU’s decision to support €297.5m ($384 million) of Belgian subsidies granted to rival La Poste.

Deutsche Post has won a court ruling to annul the EU’s decision to support €297.5m ($384m) of Belgian subsidies granted to rival La Poste.

The victory could force the European Commission, the EU’s executive arm, to formally investigate the subsidy.

Deutsche Post argued the aid, based on a preliminary investigation, was unjust and called for an in-depth review.

The issues the subsidy presented required a “detailed investigation procedure” that “would have permitted Deutsche Post and DHL International to submit their observations,” the European Court of First Instance in Luxembourg ruled.

Deutsche Post sued the commission in November 2003 after the regulator approved the capital injection by the Belgian government, which owns 50% plus one share of La Poste. The court annulled the decision, saying the regulator followed the wrong procedure.

“We’re not trying to take something away from Belgium’s La Poste, we’re trying to create a level-playing field,” said Dirk Klasen, a Deutsche Post spokesperson.

Deutsche Post told the EU court at a hearing in May 2008 that the commission strayed from its normal decision-making policy without any justification. The extension of the initial probe to more than seven months from the typical two months as well as the amount of documents Belgium requested showed the commission had encountered problems, the company said.

There is “consistent evidence” of “the partially incomplete and insufficient context of the contested decision,” the court said.

The commission had argued Deutsche Post couldn’t challenge a decision that didn’t directly involve the company.

The court rejected the argument, saying in some cases this is possible “even where the competitor’s position on the market is not substantially affected.”

Deutsche Post and DHL “were unable to present their observations on the measures unless the commission initiated the formal investigation,” said the court.

The commission appealed the decision in September 2008.