WRITTEN QUESTION E-2658/00

by Antonio Tajani (PPE-DE), Guido Podestà (PPE-DE), Giuseppe Gargani (PPE-DE) and Renato Brunetta (PPE-DE) to the Commission

(1 September 2000)

Subject: Infringement proceedings against Italy for failure to transpose Directive 97/67/EC

Following a complaint by the Dutch public postal service provider TNT Post Group (TPG), the Commission Directorate-General for Competition has instituted infringement proceedings against Italy under Article 86(3) of the Treaty. The proceedings relate to incorrect transposition of Directive 97/67/EC(1) and are designed to undermine the economic foundations of the universal postal service in Italy. In other words, they are seeking to produce the same effects as the Commission's proposal for a second directive, which has not yet been considered in Parliament.

Two and a half years after it was issued, the Netherlands has still not transposed Directive 97/67/EC, and the area of operations reserved for TPG under Dutch law continues to exceed the scope of the actual coverage requirements that the universal service has to satisfy. Backed by public money, TPG is pursuing a strategy of expansion, especially in Italy.

The Commission proposal for a directive meets the wishes of the Dutch Government in that it will liberalise the postal service in a way directly favourable to the Dutch service provider, as can be inferred from a document which the Advisory Committee on Transport, Public Works, and Waters has submitted to the State Secretary.

The resulting situation appears something of a paradox, working entirely to the benefit of TPG by creating unequal competition in which the public service provider, bound by the constraints of the universal service, has to bear the costs of that service, whereas the private provider can cream off the market and choose the richest and most prized demand segments according to market considerations.

Will the Commission therefore:

- ascertain the truth of the points set out above;

- say why it is anxious to rush ahead with liberalisation specifically in Italy, where TPG today is already generating a third of the turnover of Poste Italiane;

- say why it believes that services regarded as universal and reserved for the public provider in other Member States should be liberalised in Italy;

- say why it has chosen to proceed under Article 86(3) of the Treaty instead of the former Article 226, which allows the Member State concerned and the Commission to discuss a matter in dispute, bearing in mind that this latter procedure has been employed in cases relating to similar subjects involving other Member States;

- ascertain whether the decisions being taken in relation to Italy might unjustifiably restrict the rights of Italian citizens compared to other European citizens;

- say whether it will institute proceedings against the Netherlands with a view to recovering the systematic subsidies wrongfully granted to TNT Post Group (TPG)?

(1) OJ L 15, 21.1.1998, p. 14.

Answer given by Mr Monti on behalf of the Commission

(23 October 2000)

The infringement proceedings against Italy for violation of Article 86 (ex Article 90) in connection with Article 82 (ex Article 86) of the EC Treaty concern the extension of the general letter mail monopoly to include a series of special value-added delivery services provided by private operators in Italy. The Commission decided to launch infringement proceedings after it had received several complaints by small and medium size private operators active in providing value-added postal services in Italy in a system of open competition. While it is true that TNT Postal Group also lodged a complaint, the thrust of the current proceedings is to ensure that new or value-added services, previously provided by these small and medium sized Italian operators under a regime of open competition, are not included in the general letter mail monopoly, reserved to only one provider, the incumbent. Needless to say, the Commission, in launching the proceedings, acted to safeguard this regime of open competition in Italy and not to further the commercial interest of one particular postal operator.

The proceedings against Italy do not aim to anticipate further liberalisation of the Italian postal market but to maintain the competitive marketplace existing in Italy prior to the entry into force of Decree No 261/99. They do not seek to liberalise, but to enforce the rules on competition as contained in Articles 81 (ex Article 85) seq. of the EC Treaty. According to Article 82 of the EC Treaty an abuse within the meaning of this Article is committed where, without any objective necessity, an undertaking holding a dominant position on a particular market reserves to itself other activities in separate and neighbouring markets, although these activities could also be carried out by another undertaking as part of its activities on this separate and neighbouring market(1). Where the extension of a dominant position of a public undertaking or undertaking to which the state has granted special or exclusive rights results from a state measure, such a measure, if not justified under Article 86.2, may constitute an infringement of Article 86 in conjunction with Article 82 of the EC Treaty. Under these circumstances it is appropriate for the Commission to launch proceedings under Article 86(3) of the Treaty which states: The Commission shall ensure the application of the provisions of this Article (Article 86) and shall, where necessary, address appropriate directives or decisions to Member States.

The Commission's investigation under the EC Treaty rules of competition into several complaints lodged against Italian Decree No 261/99, reveals that this, for all practical purposes, extends the scope of the postal monopoly in favour of the incumbent for a series of special value-added services. These special services were previously provided by private operators in competition with the incumbent. The value-added special services at issue comprise special features, such as i) several attempts at delivery, ii) delivery at several alternative destinations, iii) tracking and tracing throughout transit, iv) delivery on special appointment, or v) keeping and updating of mailing lists.

The Commission has taken the preliminary view that the exception provided by Article 86.2 of the EC Treaty interpreted in the light of the 1997 Postal Directive(2), could not justify such an extension. The Directive indicates that services which do not form part of the universal service cannot be reserved to the universal service provider. Therefore, the proceedings at stake do not aim to liberalise these services but to maintain the competitive situation in Italy prior to the entry into force of Decree No 261/99. In any event, the Commission, at this stage, is analysing the reply of the Italian government to the letter of formal notice as well as the observations by the Italian Post.

The present proceedings do not discriminate against Italy vis-à-vis other Member States, since the same approach would be adopted also with regard to the incumbent of other Member States.

The infringement proceedings in no way harm the rights of Italian citizens to benefit from a universal postal service or disadvantage the Italian consumer as compared to consumers in other Member States. Far from reducing the amount of postal service available in those Member States, the Commission's proceedings aim to safeguard the widest possible choice for consumers to request new and value-added services from private operators or from the incumbent. Indeed, the Commission's intervention in the postal sector has never resulted in a reduction of available services but has resulted in maintaining or increasing competition and consequently the consumer's choice of postal services.

As to the choice of Article 86.3 of the EC Treaty for the proceedings, it is to be recalled that the proceedings concern the possible infringement of the competition rules by the Italian state and not the non-conformity of the Italian legislation with the 1997 Postal Directive.

As regards the alleged state aid granted by the Netherlands to TPG, the Commission has started an investigation on the subject, by addressing a request of information to the Dutch authorities. The authorities have replied, providing the requested information. The Commission is, at present, analysing the information received. At this stage, the Commission can not prejudge the outcome of the investigation.

(1) See Case 311/84 CBEM [1985] ECR 3261.

(2) Directive 97/67/EC of the Parliament and of the Council of 15 December 1997, on common rules for the development of the internal market of Community postal services and the improvement of quality of service (OJ L 15, 21.1.1998) at recital 21: whereas new services (services quite distinct from conventional services) and document exchange do not form part of the universal service and consequently there is no justification for their being reserved to the universal service provide.