Australia Post cleared of unfair competition claims

The Australian Competition and Consumer Commission (ACCC) has found that Australia Post is not using profits from its monopoly reserved letter services to unfairly compete in other markets. In a statement issued by the ACCC today (14 April), ACCC Chairman Rod Sims was quoted as saying: “Australia’s Post’s regulatory accounts do not show that it is cross-subsidising its contestable services with revenue from its monopoly services.

“On the contrary, in 2013-14 Australia Post’s monopoly letter services were unable to recover their costs.”

“The regulatory accounts also show that Australia Post’s overall revenues were actually lower than its costs, allowing for capital costs.”

Australia Post has a statutory monopoly over the delivery of standard letters, which weigh less than 250g and cost no more than $2.80 to send. All other services provided by Australia Post are open to competition.

According to the ACCC: “Any cross-subsidy by Australia Post from its reserved (statutory monopoly) services to its non-reserved services would be a concern because Australia Post could damage competition in other markets by the use of its legislated monopoly.”

The ACCC was given the power to monitor cross-subsidy in Australia Post in response to complaints by Australia Post’s competitors that Australia Post was damaging competition by cross-subsidising its contestable services with revenues from its monopoly letter services.