The European Commission has opened a new formal investigation against Germany concerning possiblesubsidies to Deutsche Post.
Its investigation is to focus on whether Deutsche Post AG has been overcompensated forcarrying out its universal service obligation since 1989.
The Commission ordered Deutsche Post to repay EUR 572 million to the German government inJune 2002 after it found that the company had used funds it received from the State for theuniversal service mission to finance an aggressive pricing policy intended to undercut privaterivals in the parcel sector between 1994 and 1998.
Now, following further complaints from Deutsche Post’s competitors, the Commission is toreview all government grants to Deutsche Post, and its predecessor PostDienst, to determine whetherthere was any overcompensation for its universal service obligation “above and beyond thatidentified in the 2002 decision”.
Rivals have filed complaints to the Commission alleging Deutsche Post “gained significantlyhigher financial benefits from the public compensation received than what it had had to repay asincompatible state aid.”
“In addition they brought new allegations that Deutsche Post had used the public servicecompensation to expand its commercial activities and to sell services too cheaply to itssubsidiaries DHL and Postbank,” the Commission said in a statement yesterday.
If the allegations are true, Deutsche Post and the German government will once again havebroken state aid rules and conceivably will have to repay part of the subsidies reaching back up to18 years.
In 2002, the Commission found that Deutsche Post used funds intended to compensate foruniversal service costs to finance a rebate pricing policy in its door-to-door parcel business.
According to EU state aid rules, public compensation for the provision of universal servicescan only be compatible with the EC Treaty “if it is both necessary and proportional to theobjective”.
No universal service provider may earn excessive profits or use the compensation tocross-subsidise commercial activities, the Commission says.
The Commission has recently opened similar investigations against France, the UK, Italy andPoland concerning the financing of their postal operators.
It is examining whether GBP 2.65 billion (EUR 3.93 billion) of British government loans toRoyal Mail, dating back to 2001, as well as pension contributions offset by the group, broke stateaid rules.
