COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN PARLIAMENT, THE ECONOMIC AND SOCIAL COMITTEE AND THE COMMITTEE OF THE REGIONS on the public consultation on the draft Notice on the application of the competition rules to the postal sector and, in particular, on the asssessment of certain State measures relating to postal services
Date: 1996-10-17
Institutions: European Commission
Subjects: approximation of laws, communications policy, competition law, postal and telecommunications services, postal service

COMMISSION  OF  THE  EUROPEAN  COMMUNITIES 

Brussels,  17.10.1996 
COM(96)  480  final 

COMMUNICATION  FROM  THE  COMMISSION 

TO  THE  COUNCIL,  THE  EUROPEAN  PARLIAMENT, 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
AND  THE  COMMITTEE  OF  THE  REGIONS 

on  the  public  consultation  on the  draft  Notice  on the  application  of the  competition  rules 
to the postal  sector  and,  in  particular,  on the  assessment  of  certain  State  measures 
relating  to  postal  services 

Table of  Contents 

1. 

Introduction 

2. 

Background 

3. 

Public  consultation 

4. 

Role  and  status  of the  draft  Notice 

5. 

Relationship  between  Directive  and  Notice 

6. 

Content  of the  draft  Notice 

7. 

Results  of the  public  consultation 

8. 

Conclusions  and follow-up 

3 

3 

4 

5 

5 

6 

6 

10 

Annex  1 

List  of written  reactions  on the  public  consultation 

1. 

Introduction 

In December  1995, the Commission published its proposed package of measures concerning 

the development  of the  postal sector  in the Official Journal. The  Notice  on the application  of 

the  competition  rules  to  the  postal  sector  was  published  as  a  draft  for  consultation.  This 

Communication  intends  to  provide  information  on  the  results  of  this  public  consultation.  A 

speedy finalisation of the codecision procedure on the Commission's proposal fora  European 

Parliament and Council  Directive on the development  of Community  postal services is highly 

desirable. This Communication  may  contribute to that  process. 

Several reactions to the public consultation show that there is uncertainty or misunderstanding 

on the  role and  status of the draft  Notice, and on the  relation between the  Directive  and the 

Notice. This Communication goes into these aspects before describing the results of the public 

consultation.  It finishes with further steps the Commission  intends to take with  regard to  the 

Notice. 

2. 

Background 

The Commission submitted a Green Paper on the development of the single market for postal 
services in June  19921, which was followed by an extensive public consultation. This  resulted 
in Guidelines for the Community  postal services, issued in June  19932. In its  Resolution  of 7 
February  19943,  the  Council  invited  the  Commission  to  put  forward  proposals  for  the 

harmonisation  and gradual liberalisation of the postal sector. Subsequently,  after  substantial 

discussion  the  Commission  adopted  in  July  1995  a  package  of  measures  concerning  the 

development  of  the  postal  sector,  consisting  of  a  proposal  for  a  European  Parliament  and 

Council Directive on common rules for the development of Community postal services and the 
improvement  of quality  of  service4, and  a draft  Commission  Notice  on the  application  of the 

competition  rules to  the  postal  sector  and, in particular,  on the  assessment  of  certain  State 

measures  relating to  postal  services. 

1  COM(91) 476  final 
2  COM(93)  247  of  2 June  1993 
3  OJNo  C48,  16.2.1994 
4  COM(95)  227  final,  Proposal  for  a  European  Parliament  and  Council  Directive  on 
common  rules  for  the  development  of  Community  postal  services  and  the  improvement 
of  quality  of  service. 

Both documents have been published together in the Official Journal in December  1995. The 

package  has  been  presented  to  the  European  Parliament,  the  Council, the  Economic  and 

Social Committee  and to the Committee  of the  Regions. On the basis of the first reactions to 

the  draft  Notice  it was  decided, and  announced  during  the  Telecommunications  Council  in 

November 1995, to postpone the publication of the final Notice until a decision on the Directive 

is taken. Nevertheless, such publication will occur not later than the end of 1996 as the sector 

urgently  needs the  clarity with  regard to  competition  law which the  Notice will bring. 

3. 

Public  consultation 

Interested  parties were  invited to submit  observations  on the draft  Notice within two  months 
after its publication in the Official Journal, which took place on 2 December  19955. This period 

officially  ended  on  2  February  1996.  Since  it  was  decided  not  to  publish  the  final  Notice 

immediately  after the two-month consultation  period but only after a decision on the  Directive 

is taken or, at the latest, by the end of the year 1996, it was possible to allow interested parties 

some  additional  time  to  formulate  their  reactions  to  the  Notice.  The  consultation  period  is 

formally closed with the publication of this Communication. Further reactions will be taken into 

account  to the  extent  possible  during the  rest of the  procedure. 

DG IV received 46  reactions. The organisations which  have reacted représenta  broad  range 

of different interest groups. Detailed information on the reactions received is set out below. The 

reactions will  be  taken  into  careful  consideration  during the  process  of finalising  the  Notice 

before  its  publication  in the  Official Journal. 

In  general,  the  Commission  has  printed  reactions  to  the  public  consultations  on  proposed 

Notices  and  Directives  and  made  them  available  to  interested  parties  upon  request.  In this 

case,  the  parties  which  have  responded  to the  consultation  on the  draft  postal  Notice  have 

often  done  so in combination with  a reaction to the  draft  postal  Directive. Consequently,  the 

reactions to the  draft  Directive  and to the  draft  Notice will  be  printed  together. 

5 OJ C 322/03, 1995 Draft  Commission Notice on the application of the competition rules 
to the postal sector and, in particular, on the assessment of certain State measures relating 
to  postal  services. 

4. 

Role and Status of the draft  Notice 

The draft  Notice  is  based  on the  competition  rules in the  European  Community  Treaty,  and 

explains the Commission's  views with  regard to the  application  and  practical  consequences 

of these principles in the postal sector, and the possible exceptions to these principles. It also 

sets out the position which the Commission would adopt before the Court of Justice in cases 

referred  to  the  Court  by  national  Courts  under  Article  177  EC.  The  Notice  is  not  a  legally 

binding  document  and  it does  not  need to  be: the  competition  provisions  of the  Treaty  are 

already  legally  binding.  The  Commission  is  already  faced  with  an  increasing  number  of 

complaints  and questions  about the  application of the competition  rules to the postal  sector. 

The Commission  has to ensure the application  of the competition  rules set out in the Treaty, 

and the compatibility of State measures concerning undertakings to which special or exclusive 

rights have been granted with the rules of the Treaty. The draft Notice  publicises the  guiding 

principles,  available  to  all  interested  parties, of  how  and  why  the  Commission  applies,  and 

intends to apply in the future, the competition rules of the Treaty. The draft Notice should avoid 

and prevent infringements of the Treaty by increasing clarity, and should enable all interested 

parties to  understand their  position. 

5. 

Relationship between Directive and  Notice 

The Directive and the Notice are intended to address different aspects of the postal sector, but 

they  are  intended  to  operate  in  parallel.  The  Directive  is  intended  to  create  new  legal 

provisions, and specifically to harmonise the rules on postal services. The Notice is limited to 

explaining the Commission's view on already applicable Treaty provisions and their  relevance 

for the  postal  sector:  primarily  this  concerns  Community  competition  law.  It would  not  have 

been appropriate to write Articles into the proposal for a Directive which  merely  re-stated the 

existing law. But it was thought useful, and indeed necessary, to explain in a certain  amount 

of  detail  what  the  Commission  considers  to  be the  implications  of  the  existing  competition 

provisions for  postal  monopolies  and  services. 

The  Directive  will  impose  a  series  of  positive  obligations  on  Member  States,  primarily  to 

provide  a  good  quality  postal  service.  It  also  authorises  them  to  impose  universal  service 

obligations  on postal  companies,  or to  require competing  postal operators to contribute to a 

fund to finance the  universal  service. 

The Notice, on the other hand, being based on competition law, points out that  certain kinds 

of behaviour, either of Member States or of dominant postal operators, are not permitted. Since 

the  Notice  is stating  the  existing  law,  it  has to  use the  same  terms  used  in the  competition 

rules of the  Treaty. 

6. 

Content of the draft  Notice 

-  Chapter  1 of the draft  Notice contains  a number of definitions which are necessary for the 

text  which  follows.  Definitions  which  appear  in  the  Directive  and  in  the  draft  Notice  are 

intended to  be  identical. 

-  Chapter  2 explains the  meaning  of public undertakings  and undertakings to which  special 

or exclusive  rights are granted, according to Article 90(1)  of the  Treaty. 

-  Chapter 3 explains how the freedom to provide services in the sector, exceptionally,  has to 

be interpreted in the light of Article 59 of the Treaty. This chapter also addresses the issue of 

licensing. 

-  Chapter  4  provides  a  description  of  the  Commission's  views  with  regard  to  the  relevant 

markets within the  postal sector.  It explains why the  public postal operators are regarded as 

having dominant positions and touches on potential abuses of these positions vis-à-vis users 

of  postal  services  and  competitors. 

-  Chapter  5 explains  in general what exemptions from the general prohibition  of  restrictions 

of competition  could be acceptable from a competition  law point of view and how,  according 

to. trie Commission, these could be applied to the postal sector. This includes issues such as 

transparency  of accounting  and  non-discriminatory  access to the  postal  network. 

-  Chapter  6 outlines  the guiding  principles with  regard to State  aid to  postal  operators. 

-  Chapter 7 concerns a review of the Notice in light of case experience, which is foreseen for 

the  year  2000. 

7. 

Results of the  public  consultation 

As a result of the public consultation the Commission has to date received 46 reactions to the 

draft Notice. This figure does not include the opinions presented by the European  Parliament 

(provisional), the Economic and Social Committee, and the Committee of the Regions. Some 

of the  reactions  are very  short and  only  concern one or two issues, others are very  detailed 

and touch  on  nearly every  paragraph of the draft  Notice. 

It is possible to distinguish several groups of respondents with different interests: public postal 

operators  and  private  operators,  trade  unions,  user  organisations,  associations  and  other 

organisations,  and  national  regulatory  authorities  and  Member  States.  The  classification  of 

certain respondents within the particular interest groups identified above has not always been 

self-evident. The overall appreciation of the draft Notice varies per group while remaining quite 

consistent within  most  groups. 

A  majority  of  the  respondents,  60  %  (28  out  of  46),  take  a  positive  attitude  towards  the 

contents of the Notice and support the publication of a final version. The main elements of the 

reactions  per group  are as follows. 

7.1  Public  Postal  Operators 

PostEurop, which  is the Association  of European Public  Postal Operators, and the  UPU, the 

Universal  Postal  Union,  have  both  been  incorporated  in  this  group  of  respondents.  The 

reactions of PostEurop  and the  UPU are similar to those expressed by most of the  individual 

public  postal  operators. 

A majority  of the  public  postal operators  does  not support the contents  of the  draft  Notice  in 

its  current  form.  Their  comments  point  out  that  in their  view  the  approach  and  the  wording 

taken in the draft  Notice are still different from that taken in the Directive. Although mostfcublic 

operators are in favour of a gradual and controlled opening of the market concern is expressed 

with regard to the  possible  effects  of the  liberalization of direct mail and  inward  cross-border 

mail. Most public postal operators fear that liberalization of these markets will lead to abusive 

distribution by competitors or to abusive diversion of reserved mail. The postal operators from 

Member States  where  direct  mail has  been partially  or completely  liberalized do  not  confirm 

this view. Some  public operators state that  liberalisation on the  basis of contents  or origin of 

the  postal items will cause  practical problems. A special problem with  regard to  liberalization 

of inward cross-border mail is said to exist in Ireland and Luxembourg. In these Member States 

the  proportion  of  inward  cross-border  mail  is notably  higher than the  EU average. 

The public postal operators in Member States where the postal market is fully liberalized would 

prefer reciprocal market access. They fear that public postal operators with a protected home 

market, and who  may advocate  large reserved areas, will enter their geographical markets to 

extend their  activities. 

There  is confusion  about  the  issue  of  "downstream  access". Some  operators  fear that  they 

may  be  forced  to  open  up  (even  parts  of)  their  network  at  every  point  that  customers  and 

competitors would desire. Most public operators recommend that the coordination between the 

Directive (in its final form) and the Notice be improved and would prefer them to be  published 

together. 

The postal operators who have reacted to the draft Notice in a supportive manner have stated 

that their experiences with liberalization are positive. These operators stress that  substitution 

by,  for  example,  fax  and  e-mail  is  the  real  threat  to  the  postal  market.  They  advocate 

liberalization according to a clear and short timetable and they would prefer new regulation to 

be as  limited  as  possible. 

7.2  Private Postal Operators 

The  reactions  from the  private  postal  operators  are unanimously  positive  with  regard to  the 

gradual 

introduction  of 

liberalisation  as  proposed.  These  operators  appreciate 

the 

Commission's  interpretation of the competition rules and the clarity which the Notice will bring 

with  regard  to  the  application  of  the  competition  rules  is  warmly  welcomed.  The  private 

operators  look forward  to fair  competition  on the  postal market  and  to  an  extension  of  their 

permitted activities. Concern is expressed with regard to the possibility of continuation of cross-

subsidisation  from  the  reserved  sector  to  the  non-reserved  sector  and  the  Commission's 

attention  is drawn to the  issue  of the  application  of VAT. 

7.3  Trade  Unions 

The reactions of the trade unions focus on the possible effects of liberalization on employment. 

It is feared that measures from postal operators to improve their efficiency  and an increase of 

competition  in  the  postal  sector  will  lead  to  a substantial  limitation  of  the  numbers  of jobs. 

Concern  is  also  expressed  on  the  coordination  between  the  Directive  and  the  Notice.  If 

guidelines are proven to be needed, the trade unions would prefer them to be published  after 

the  publication  of the  Directive. 

7.4  User  Organisations 

The user organisations are unanimously in favour of gradual liberalization of the postal market. 

They prefer users to have the possibility of choosing from several suppliers of postal services. 

Some user organisations recommend keeping Direct Mail and inward cross-bordermail outside 

of the reservable area. It is interesting to note that  public postal operators say that they  want 

to protect the quality  of service  interests of users by maintaining a large reserved area, while 

the user organisations expect quality of service to improve, and tariffs to decrease, through an 

increase  in competition. The coherence  between the Directive and the  Notice  is regarded as 

a  point  of concern. 

7.5  Associations and other  Organisations 

Included in this group is the Joint Committee on postal services. This Committee ensures the 

dialogue  between  representatives  of  employers  and  employees  in  the  postal  sector.  The 

reaction  of  the  Joint  Committee  on  postal  services  is  similar  to  those  expressed  by  most 

individual  public  postal  operators  (see  above).  A  large  majority  of  associations  and  other 

organisations  have  expressed  a  positive  attitude  towards  the  Notice  and  welcome  the 

introduction  of  more  competition  on  the  postal  market.  These  organisations  placed  much 

emphasis  on  increased  transparency  of  accounting  and  on  the  close  monitoring  of  cross-

subsidisation  between  reserved and non-reserved areas. They want this to be restricted to a 

minimum level. Quality of service needs to improve and is expected to improve as a result of 

liberalization and competition. A minority of associations and other organisations express their 

concerns  qn the  coordination  between the  Directive  and  the  Notice  in  its  current form.  The 

European  Blind  Union  asks for special  provisions for disabled  people. 

7.6  National Regulatory Authorities and Member  States 

A  clear  majority  of  the  national  regulatory  authorities  and  Member  States  which  have 

responded to the consultation support the draft Notice. Included in this group is the  European 

Committee on  Postal  Regulation  (ÔERP) which in fact  represents all postal  regulators in the 

EU. 

Only a few  national  regulatory authorities have responded  individually.  CERP welcomes  the 

Notice  but  feels  a  need  for  improved  consistency  between  the  Directive  and  the  Notice,  in 

order  to  achieve  a  higher  level  of  legal  certainty.  CERP  expresses  its  concerns  over  the 

application of an open access principle. Limitation of cross-subsidisation is an important issue 

for the  national  regulatory  authorities. 

The  coherence  between  the  Directive  and the  Notice  is  an  important  issue  for  most  of  the 

Member  States  which  have  responded  individually.  One  Member  State  appreciates  the 

Commission's attempt to bring clarity to the postal sector on the application of the  competition 

rules, but strongly opposes liberalization of direct mail and inward cross-border mail  because 

of the  presumed  risk of "cream-skimming" and the  deviation  of  mail. Another  Member  State 

draws special attention to the social consequences of reforms in the postal sector and to the 

need to improve the quality of cross-border postal services. One Member State has expressed 

its  support  for  the  Notice  and  the  Directive,  though  it  would  prefer  both  documents  to  be 

published together. One Member State broadly welcomes the Notice and the guidance  it will 

bring,  and  urges  that  the  liberalization  momentum  be  maintained.  Another  Member  State 

confirms the Commission's  competence to issue a Notice and welcomes  its publication. This 

Member  State  emphasises  that  the  Notice  makes  sufficiently  clear  what  position  the 

9 

Commission intends to take with regard to the interpretation and application of the competition 

rules  and on the  issue  of freedom to  provide services. 

8. 

Conclusions and follow-up 

As  stated  above,  the  full  comments  are  available  on  request.  A  majority  of  the  reactions 

supports  the  draft  Notice.  It would  be  extremely  difficult  to  attach  different  weights  to  the 

reactions  received, to  do this in an objective  way,  and to determine the overall  appreciation 

of the Notice on that basis. The reactions reflect the specific interests of the different  groups. 

Uncertainty about future developments in the postal sector, which is inevitable taking  account 

of technological developments, even without any liberalization, results in a defensive  attitude 

from public postal operators and trade unions. A number of these respondents  have  reacted 

to  the  Notice  on  the  somewhat  formal  grounds  that  it  should  not  be  adopted  before  the 

Directive and that it is not always using the same terminology as the Directive. These reactions 

seem to translate concerns among these respondents about maintaining the balance between 

harmonisation  and  liberalisation  and the  impact  of a more competitive  market  environment. 

Aside from this the consensus about the advantages of introducing or extending  competition 

in the  postal sector  is widespread.  It is clear that the general appreciation of the  Notice  can 

be  improved  considerably  by  a clearer  explanation  of  its role and  legal  status.  Discussions 

between the Commission's services and some of the parties have proved to be very useful in 

this  respect.  The  fear  that  the  ultimate  Directive  and  Notice  will  not  be  consistent  can  be 

removed by publishing the Notice in a final (adjusted) form. The approach taken to  postpone 

the publication of the Notice until the end of this year was appreciated by many  respondents. 

The reactions to the public consultation will be further analyzed in the context of the  progress 

with  regard to  decision  making  on the  postal  Directive, and will  be taken  into  consideration 

during the process of finalising the Notice. The same applies to the opinions presented by the 

European Parliament, the Social and Economic Committee and the Committee of the Regions. 

On the basis of the public consultation  it has become clear that the text of the Notice  can be 

improved to achieve further clarity on important issues, notably issues such as definitions, the 

issue  of  universal  service  and  the  relationship  between  reserved  areas  and  special  and 

exclusive  rights, on access  principles  and on cross-subsidisation. The  European  Pariiament 

concluded  its first  reading on the draft  postal harmonisation  Directive on  9 May  1996.  Work 

on the  draft  Directive continues  in the  European  Parliament  and in the  Council. The  results 

achieved  by the end of this year with respect to the draft Directive will be taken into  account 

when the  Notice will  be finalised, with  subsequent  publication  in the  Official  Journal. 

10 

LIST  OF WRITTEN  REACTIONS  ON THE  PUBLIC  CONSULTATION 

Annex  1 

Public  Postal  Operators 
La  Poste/de  Post,  Belgium. 
Post  Danmark,  Denmark 
Deutsche  Post AG, Germany 
La Poste,  France 
An  Post,  Ireland 
Postes  et Télécommunications,  Luxembourg 
PTTPost,  The  Netherlands 
Finland  Post  Ltd 
Posten  pà Aland,  (Finland) 
Sweden  Post,  Sweden 
The  Post  Office,  United  Kingdom 

PostEurop 
Universal  Postal  Union 

Private  Operators 
Association  of  European  Document  Exchanges 
Association  of  European  Express  Carriers 
The  European  Express  Organisation 
Transport  Development  Group  pic, Consumer  Division, United  Kingdom 
Transport  en  Logistiek  Nederland, The  Netherlands 

Unions 
Communication  Workers Union/Communication  Managers Association,  UK 
Deutsche  Postgewerkschaft,  Germany 
Postal  Telegraph  and  Telephone  International 
Sindicato  Nacional  dos Trabalhadores  dos Correios e Telecomunicacoes,  P 

User  Organisations 
Bureau  Européen  des  Unions  de Consommateurs 
European  Mail &  Express  Services  Users Association 
European  Mail  Order  and  Distance  Selling Trade Association 
Federation  of  European  Direct  Marketing 
Mail  Users'Association  Ltd, United  Kingdom 
The  Reader's  Digest Association,  Inc 

11 

1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 

12 
13 

14 
15 
16 
17 
18 

19 
20 
21 
22 

23 
24 
25 
26 
27 
28 

Associations and Other  Organisations 
British Printing  Industries  Federation, United  Kingdom 
Envelope  Makers  &  Manufacturing  Stationers* Association,  United  Kingdom 
EU Committee  of the American  Chamber of Commerce  in  Belgium 
European  Blind  Union 
European  Centre  of  Enterprises with  Public  Participation 
Fédération Française des  Sociétés  d'Assurances,  France 
International Chamber  of Commerce 
Union  of  Industrial  and  Employers Confederations  of  Europe 

Joint  Committee  on  Postal Services 

National Regulatory Authorities and Member States 
Ministère de  l'Economie  et des Télécommunications,  Belgium 
Bundesministerium fur  Post  und Telekommunikation, Germany 
Ministère  de  La  Poste des Télécommunications  et de  l'Espace,  France 
Hoofddirectie  Telecommunicatie en  Post, The  Netherlands 
Bundesministerium  fur  Ôffentliche Wirtschaft  und Verkehr, Austria 
Instituto  das  Comunicaçôes de  Portugal 
Ministry  of Transport  and Communications,  Finland 
Department  of Trade  and  Industry,  United  Kingdom 

European  Committee  on  Postal  Regulation 

29 
30 
31 
32 
33 
34 
..35 
36 

37 

38 
39 
40 
41 
42 
,...43 
44 
45 

46 

12 

ISSN 0254-1475 

COM(96) 480 final 

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