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Brussels, 20 October 2004

The Commission acts against the discrimination of mail preparation service providers in Germany

The European Commission has ruled against certain provisions in Germany’s postal regulatory framework which bar commercial mail preparation firms from earning discounts for handing over pre-sorted letters at Deutsche Post AG’s (DPAG) sorting centres. The incriminated provisions induce DPAG to discriminate against mail preparation firms: whilst large senders are allowed to feed self-prepared mail directly into sorting centres and are granted discounts for doing so, commercial firms are barred from discounts for mail preparation.

Commenting on the decision, Competition Commissioner Mario Monti said: “The German Postal Law induces Deutsche Post to abuse its dominant position thereby putting commercial operators at a considerable competitive disadvantage. The Commission’s action will establish a competitive level playing field for mail preparation firms. The experience in countries where a large part of companies’ mail is outsourced shows that the overall letter and direct mail volume has increased to the benefit of all operators.”

Upon a complaint by BdKEP, a German association of postal service providers, the Commission decided today that the German Postal Law violates European Union competition rules because it induces Deutsch Post AG, Germany’s incumbent postal services operator, to grant quantity-based discounts to bulk mailers who feed self-prepared mail directly into sorting centres but bars it from granting such discounts to commercial firms that handle mail preparation services[1] for others.

Deutsche Post has the exclusive right to distribute letters below 100 grams (the so-called reserved area). The provision of mail preparation services, including the pre-sorting of the mail and its transport from the sender’s premises to a chosen point in the incumbent’s network, do not fall within the ambit of the reserved area of the Postal Directive.

The decision is adopted pursuant to Article 86(3) of the EU Treaty which prohibits Member States from enacting or maintaining in force any measures which allow or encourage public undertakings to violate EU rules, including the rules banning agreements restrictive of trade and abuses of dominant positions (Articles 81 and 82).

The Commission finds that the German government has failed to demonstrate that the discriminatory tariffs were justified on the basis of Article 86(2) and recalls that, as established in its 1998 Notice on the application of the competition rules to the postal sector, intermediaries should be able to freely choose from amongst available access points to the public postal network.

Whilst acknowledging the infringement, Germany has so far refused to amend the law in a satisfactory manner. It has now two months to inform the Commission of the measures taken to comply with EU law.

This is the second time the Commission takes a decision in the area of mail preparation services. In the 2001 SNELDP case, the Commission also addressed an Article 86 decision to France -- where consolidation and downstream access is a reality -- after concluding that the then existing legal framework was not sufficient to monitor the conflict of interest between La Poste and private mail preparation firms.

[1] Mail preparation means making up items, collecting, placing them in containers, sorting by destination and delivering them to public access points.

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