Eija-Riitan kirje komissaari Montille, sisältö englanniksi
Dear Commissioner Monti,
I am writing to you with regard to potential breaches of EU competition law in the postal sector.
The Finnish postal market, similar to the Swedish one, has been liberalised for some time, and there are promising signals coming from England about a timeline to open up the UK postal market, too. It is obvious that a monopoly in these countries is no longer of use, since the universal service is guaranteed.
The same could be said about other countries, such as Germany, where the post office has been through a modernisation process already years ago and considerable efficiency gains have been realised. Nonetheless, Germany still very much sticks to reserve the maximum permissible monopoly for its post office.
This is all the more surprising given the fact that the German postal operator is active in other, logistics segments through companies such as DHL, Danzas etc. that it has acquired in recent years. Taking into account that the process of entering these markets must have been financed by monopoly proceed, raises in my vies three important questions:
Do these practices not distort competition, since other players in the market cannot fall back to income from monopoly activities?
How are customers at the moments protected against too high tariffs of monopoly mail services, generating billion of Euro in profits? and
Are your services or authorities looking into whether monopoly tariffs are corresponding with the costs of providing monopoly services, and if so, what have been the findings so far?
Thank you in advance for looking into these matters and for your kind reply.
Eija-Riitta Korhola, MEP
Dear Ms Korhola,
In your letter, you express concern about the market behaviour of Deutsche Post AG (DPAG), a company which – in your view- "must have" used monopoly proceeds to finance its acquisition of companies such as DHL and Danzas.
You ask whether the existence of postal monopolies distorts competition, since not all postal operators have monopolies to fall back on. Furthermore, you want to know how consumers are protected against overprizing of monopoly postal services and whether the Commission is safeguarding that monopoly tariffs correspond to the costs of providing monopoly postal services.
I will endeavour to reply to your questions below.
I completely agree with you on your observation that the existence of monopolies distorts competition. By definition, all types of monopolies have distortive effects, first by precluding competition altogether within the scope of the monopoly itself and second, by giving competitive advantages to the monopoly companies also in markets where there is competition. As you correctly point out, monopoly profits may be used to cross-subsidise activities subject to competition. This is precisely the reason why the Commission initiated the first step towards gradually abolishing postal monopolies by adopting the Postal directive in 1997, followed by the Amending Directive in 2002 which open up the possibility of the full accomplishment of the internal market for postal services by 2009.
As regards your concerns about monopoly pricing of postal services, I would like to emphasise the fact that it is the Member States themselves that have the primary responsibility to ensure that postal tariffs charged by the monopoly operator are proportionate to the actual costs incurred and that consumers are protected against "overcharging".
The German regulator – the Regulierungsbehörde für Telekommunikation und Post (RegTP) – has far-reaching powers under the German Postal Act to determine the level of postal tariffs based on an analysis of the incumbent's costs. I am sure you are aware of the fact that, following the intervention of RegTP, DPAG was obliged to reduce its postal tariffs as of 1. January this year.
Finally, I would like to inform you of the fact that following a complaint the Commission is currently investigating the level of the postal tariffs charged by DPAG in Germany, in order to determine whether the complaint's allegation that these tariffs are excessive and therefore infringing Article 82, is correct. At this point in time, I cannot disclose anything about the income of our investigation since this investigation is still pending.