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EU calls for tougher action over postal market abuses

Wednesday 23 January 2013 - 11:31
EU calls for tougher action over postal market abuses

European Commission competition watchdogs have suggested that national regulators across the continent need to take a harder line against dominant postal market operators who are accused of manipulating the market.

In a report, commissioners noted that 50 complaints have been brought across the continent alleging 'dumping', the offering of a postal rate below cost to a business customer to prevent rivals from winning a contract.

The report criticises the way in which such pricing issues are investigated, which relies on financial information provided by the party against whom the complaint is made.

It is alleged that these figures can be manipulated so as to make it difficult for the competition authorities to determine whether any abuses have taken place.

The report adds: “The operator accused of abuse of dominance will have an incentive to present information in a way that serves its own interests.”

Instead, it suggests the adoption across the EU of a model already used in Germany and Denmark, which works out the cost of each of the "elementary activities" which comprise a business mail service, and basing judgments on whether any price-fixing has taken place on these deconstructed figures.

It also suggests that operators should be able to adjust their prices to take account of fluctuations in volumes of mail being handled, as currently happens in France.

“In times of rapid volume decline, it is imperative that the regulatory design contains a volume adjuster which allows for higher prices to compensate for higher unit costs due to reduced economies of scale,” stated the report.

“If the universal service provider is not allowed to perform such adjustments this might imply a risk that the provision of universal services becomes financially unsustainable.”

 

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