2007/564/EC: Commission Decision of 6 August 2007 exempting certain services in the postal sector in Finland, excluding the Åland Islands, from the application of Directive 2004/17/EC of the European Parliament and of the Council coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors (notified under document number C(2007) 3700) (Text with EEA relevance )
Date: 2007-08-06
Institutions: European Commission
Subjects: Finland, award of contract, derogation from EU law, postal service

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Official Journal of the European Union

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COMMISSION DECISION

of 6 August 2007

exempting certain services in the postal sector in Finland, excluding the Åland Islands, from the
application of Directive 2004/17/EC of the European Parliament and of the Council coordinating the
procurement procedures of entities operating in the water, energy, transport and postal services
sectors

(notified under document number C(2007) 3700)

(Only the Finnish and the Swedish texts are authentic)

(Text with EEA relevance)

(2007/564/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Business (BtB) and Business to Consumer (BtC)),
both domestic and international;

Having regard to the Treaty
Community,

establishing the European

(b) addressed direct mail services;

the European
Having regard to Directive 2004/17/EC of
Parliament and of the Council of 31 March 2004 coordinating
the procurement procedures of entities operating in the water,
energy, transport and postal services sectors (1), and in particular
Article 30(4) and (6) thereof,

Having regard to the request submitted by Finland by e-mail of
9 February 2007,

After consulting the Advisory Committee for Public Contracts,

Whereas:

(1)

(2)

I. FACTS

On 9 February 2007, Finland transmitted a request
pursuant to Article 30(4) of Directive 2004/17/EC to
the Commission by e-mail. The Commission requested
additional
information by e-mails of 21 March, 18
April and 15 May 2007, which was transmitted by the
Finnish authorities by e-mails of 4 April, 24 April and 16
May 2007.

(hereinafter

The request submitted by Finland on behalf of Suomen
Posti Oyj, which as of 1 June 2007 changed its name to
referred to as Finland Post)
Itella Oyj,
concerns certain postal
services as well as certain
services other than postal services in Finland, excluding
the Åland Islands. The services described in the request
are as follows:

(a)

addressed letters services (Consumer to Consumer
to
to Business
(CtC), Consumer

(CtB), Business

(c) unaddressed direct mail services;

(d) BtB standard parcel services, domestic and inter-

national;

(e) BtC standard parcel services, domestic and inter-

national;

(f)

consumer standard parcel services (CtC and CtB),
domestic and international;

(g)

express and courier parcel services, domestic and
international;

(h) early delivery of newspapers;

(i)

standard delivery of newspapers;

(j)

light goods services (also called single consignments)
and freight services;

(k) warehousing services;

(l)

contract logistics;

(m) overall solutions in respect of direct mail;

(n) printing services;

(o) data management services;

(p) e-transaction services;

(1) OJ L 134, 30.4.2004, p. 1. Directive as last amended by Council

Directive 2006/97/EC (OJ L 363, 20.12.2006, p. 107).

(q) philatelic services.

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(3)

(4)

(5)

(6)

The request is accompanied by the conclusions of the
independent national authority, Kilpailuvirasto/Konkur-
rensverket (the Finnish Competition Authority), which,
on the one hand, does not see ‘any particular reason to
the exclusion referred to in
oppose the granting of
Article 30 …’, while stating on the other hand that ‘it
should be remembered that Finland Post Corporation still
has a very strong market position in its traditional core
business,
letters,
i.e. the collection and distribution of
packages and other addressed items, even though the
entire postal sector was opened up to competition in
Finland as early as 1994 pursuant to the Act on Postal
Operations. Nevertheless, no competition has emerged in
Finland Post Corporation’s traditional core business.’

II. LEGAL FRAMEWORK

Article 30 of Directive 2004/17/EC provides
that
contracts intended to enable the performance of one of
the activities to which Directive 2004/17/EC applies shall
not be subject to that Directive if, in the Member State in
which it is carried out, the activity is directly exposed to
competition on markets to which access is not restricted.
Direct exposure to competition is assessed on the basis
the specific
of objective criteria,
characteristics of
is
sector
deemed to be unrestricted if the Member State has imple-
mented and applied the relevant Community legislation
opening a given sector or a part of it.

taking account of

concerned. Access

the

the European Parliament and of

Since Finland has implemented and applied Directive
97/67/EC of
the
Council of 15 December 1997 on common rules for
the development of the internal market of Community
services and the improvement of quality of
postal
service (1), access to the market should be deemed not
to be restricted in accordance with the first subparagraph
of Article 30(3) of Directive 2004/17/EC. Direct
exposure to competition in a particular market should
be evaluated on the basis of various criteria, none of
which are, per se, decisive.

In respect of the markets concerned by this decision, the
market share of the main players on a given market
constitutes one criterion which should be taken into
account. Another criterion is the degree of concentration
on those markets. As the conditions vary for the different
activities that are concerned by this Decision, the exam-
the competitive situation should take into
ination of
account the different situations on different markets.

(1) OJ L 15, 21.1.1998, p. 14. Directive as last amended by Regulation
(EC) No 1882/2003 of the European Parliament and of the Council
(OJ L 284, 31.10.2003, p. 1).

(7)

narrower market

definitions might

be
Although
envisaged in certain cases, the precise definition of the
relevant market can be left open for the purposes of this
Decision as far as a number of the services listed in the
request submitted by Finland are concerned to the extent
that the result of the analysis remains the same whether
it is based on a narrow or a broader definition.

(8)

This Decision is without prejudice to the application of
the rules on competition.

(9)

(10)

III. ASSESSMENT

Services not covered by Directive 2004/17/EC

6(2)(c)
of Directive
accordance with Article
In
2004/17/EC,
such as warehousing
services,
logistics
services and contract logistics, and added-value services,
such as printing services, data management services and
e-transaction services, are covered by that Directive on
condition that such services are provided by entities
which also provide postal services within the meaning
of Article 6(2)(b) of Directive 2004/17/EC. According
that
to the information available to the Commission,
condition is not met
in Finland in respect of ware-
housing, printing, data management and e-transactions
services. The Directive 2004/17/EC consequently does
not apply to the provision of those services in Finland.

Services

to which Article 30(1) of Directive

2004/17/EC is not applicable

Addressed letter services

In respect of consumer letters (CtC and CtB addressed
letter services, domestic and international), Finland Post
has a market share of 100 %. For business letters,
its
estimated market share varies between 85 % (for BtB
addressed letter
services, domestic and international)
and 95 % (for BtC addressed letter services, domestic
and international), with none of its competitors having
obtained an estimated market share exceeding 10 %.
According to the available information, Finland Post's
market shares for international addressed letter services
(inbound and outbound letters) are the same as for
purely domestic services. According to the Finnish auth-
orities, those services are directly exposed to competition,
first because of competitive pressure from the possibility
to substitute ‘traditional’ paper-based letter services with
electronic means of communication (such as e-mail or
SMS) and,
second, because the existing unrestricted
access to the market exposes it to potential competition

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rather

it
from possible newcomers. In respect of substitution,
should be noted that according to EC competition rules,
substitutability should be analysed, inter alia, on the basis
of product characteristics, price of
the products and
barriers associated with the switching of demand to
potential substitutes.
It appears that the characteristics
of paper-based mail and of electronic communications
differ significantly and that there is a significant barrier
to switching between paper-based mail and electronic
mail (1). This indicates that electronic communications
belong to a different product market and therefore they
cannot exercise a direct competitive restraint on Finland
Post's addressed letter services. Furthermore,
it would
seem that the main effect of the increased use of elec-
tronic mail would substantially reduce the overall size of
the paper-based mail market,
than introduce
competition within it. For example, according to the
information supplied, the response by Finland Post to
an increased marketing of e-invoicing by Finland's
banks was to offer its own electronic services and not
take any initiative concerning ‘traditional’, paper-based
communications. Second, as to the potential competition,
it is significant that the entire postal sector has been
this has
opened to competition since 1994 and that
until now only resulted in competitors gaining an
aggregate estimated market share of just 15 % even in
the most readily competitive segment
(BtB addressed
letter services, domestic and international). As a result,
there is no indication that the potential competition will
role in the foreseeable future.
play any significant
Consistent with
independent
the
national authority, Kilpailuvirasto/Konkurrensverket (the
Finnish Competition Authority), it should be concluded
that the services examined in this recital are not directly
exposed to competition in Finland. Therefore Article
30(1) of Directive 2004/17/EC does not apply to
contracts
those
activities in Finland.

intended to enable

the pursuit of

conclusions

of

(12)

(13)

Consumer standard parcel services (CtC and CtB),
domestic and international

strong with an estimated market
the biggest

In respect of these services, Finland Post's position is
quite
share of
80 % (2). The market share of
(and only
significant) competitor of Finland Post covers virtually
the remaining 20 % (3). Consistent with the conclusions
of
should be
concluded that the category of services examined is not
directly exposed to competition in Finland. Therefore
Article 30(1) of Directive 2004/17/EC does not apply
to contracts intended to enable the pursuit of
those
activities in Finland.

the Finnish competition authority,

it

Early delivery of newspapers

This service is defined as morning delivery, seven days a
week, of newspapers published at least three times per
week. In respect of this service, Finland Post has a market
share estimated at almost three quarters (74 %) and that
its biggest competitor amounts to approximately
of
10 %. In view of the high market share of Finland Post
and conversely the relatively low market share of even its
biggest competitor,
it should be concluded that early
delivery of newspapers is not directly exposed to compe-
tition in Finland. Therefore Article 30(1) of Directive
2004/17/EC does not apply to contracts intended to
enable the pursuit of this activity in Finland.

Standard delivery of newspapers

(11)

Addressed direct mail services

competitors having obtained

the
In respect of addressed direct mail which for
purposes of
this Decision means addressed deliveries
intended as marketing communications, Finland Post
has an estimated market share of 90 % with none of
its
share
estimated to exceed 10 %. In view of this high level of
concentration on this market and in the absence of any
other indicators to the contrary, it should be concluded
services are not directly
that addressed direct mail
exposed to competition in Finland. Therefore Article
30(1) of Directive 2004/17/EC does not apply to
contracts intended to enable the pursuit of that activity
in Finland.

a market

(14) With a market share of 100 % Finland Post is the only
supplier of these services. As the delivery of these news-
papers takes place at the same time as the delivery of
letters and using the same circuits as those used for the
delivery of addressed letter
services examined under
recital 10, the same conclusion as to the competitive
situation applies, particularly since the different charac-
teristics of printed newspaper and electronic communi-
cation are even more obvious here. For these reasons it
should be concluded that standard delivery of news-
is not directly exposed to competition in
papers
Finland.
Directive
Article
2004/17/EC does not apply to contracts intended to
enable the pursuit of that activity in Finland.

Therefore

30(1)

of

(1) For instance, roughly one third of Finnish households are not
connected to the Internet. Furthermore,
the Finnish
population that has access to e-mail at home is stated to be ‘over
half’, which, conversely, means that almost half do not have such
access at home.

the part of

(2) The estimated market share of Finland Post remains the same,
namely 80 %, regardless of whether the markets are defined as
CtC or CtB and it
is also the same regardless of whether the
markets are defined as domestic or international.

(3) In other words, the share of this competitor barely reaches one

quarter of that of Finland Post.

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Overall solutions in respect of direct mail

the

and/or

services

addressed

unaddressed

combinations of various

(15) According to the notification and the supplementary
information submitted by
Finnish authorities,
overall solutions in respect of direct mail are seen as
such as
different
printing services, addressing and focusing services, copy
services and (electronic) feedback services in combination
with
direct mail
services (1). The precise combination of services depends
on the demands of the individual customers. Taken indi-
vidually, Finland Post's estimated market shares for some
of the services that could be combined within an ‘overall
solution’, vary quite widely:
for addressed direct mail:
90 %, unaddressed direct mail: 41 %, printing services:
36 %, data management services (which include feed-
back services): 4 %. This would seem to indicate that
the competitive situation cannot be the same irrespective
of the chosen combination of services. Also, unaddressed
direct mail can be considered as being directly exposed to
competition, whereas that is not the case for addressed
direct mail. Since it cannot be ascertained which services
may be grouped together if one or more customers
them, a decision as to the legal
decide to request
regime applicable to overall
solutions would entail
substantial legal uncertainty. Under these circumstances,
overall solutions in respect of direct mail as defined in
the Finnish notification cannot be the subject of a
of Directive
to Article
decision
2004/17/EC as a single category of services.

pursuant

30

Services

to which Article 30(1) of Directive

2004/17/EC is applicable

Unaddressed direct mail services

(16) On this market, Finland Post's market share amounts to
an estimated 41 %. Considering the degree of concen-
tration on this market, where the biggest competitor
has obtained a share estimated at approximately 30 %,
these factors should be taken as an indication of direct
exposure to competition.

than for domestic services, between the order of 13 and
15 %. Considering that the estimated aggregate market
shares of the two biggest competitors with regard to
domestic services amount to 28 %, which is not substan-
tially different from the market share of Finland Post, it is
concluded that the activity is directly exposed to compe-
tition.

(18)

BtC standard parcel services, domestic and interna-
tional

for domestic

Finland Post's market
services
share
amounts to an estimated 63 %, which is a relatively
high level per se. For
international services, Finland
Post's market share, according to the available infor-
mation,
is lower than for domestic services, between
13 and 15 %. However, at 37 % for domestic services,
the estimated market share of the biggest competitor
amounts to more than half of that of Finland Post and
at that level
it can be considered that that competitor
would be able to exert a significant competitive pressure
on Finland Post. These factors should therefore be taken
as an indication of direct exposure to competition.

Express and courier parcel services, domestic and inter-
national

(19) On this market, Finland Post does not have the biggest
market share and its estimated share of 10 % is several
times smaller than that of its biggest competitor, whose
market share lies in a range between a third and up to a
half of the market. These factors should therefore be
taken as an indication of direct exposure to competition
of express and courier parcel services, domestic and inter-
national.

BtB standard parcel services, domestic and international

(17)

In respect of domestic BtB standard parcel services,
Finland Post's market share amounts to an estimated
35 %. For international services, Finland Post's market
is lower
share, according to the available information,

(1) The supplementary information given also refers to the development
of advertising content as a service that might fall within the concept
of ‘overall solutions in respect of direct mail’. However, as such
services are neither a relevant activity pursuant
to Article 6 of
Directive 2004/17/EC nor offered by Finland Post or its subsidiaries,
they have not been examined.

Light goods services and freight services

(20) On the market for light goods services, defined as trans-
portation of single consignments in transportation units
of 35 to 2 500 kg, and the market for freight, defined as
transportation services concerning heavy container loads,
over 5 000 kg or heavy container loads, 2 500-5 000 kg,
Finland Post has an estimated market share of 6,7 % as
regards the market for light goods services and 1,7 % as
regards the market for freight. Those shares are several
times smaller than the aggregate market shares of its two
biggest competitors. On the market
light goods
the two biggest competitors have estimated
services,
shares amounting to 51 % and 30 %,
i.e. an estimated
aggregate share of 81 %. On the freight market, the two
biggest competitors have an estimated aggregate share of

for

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92 % (80 % and 12 % respectively). These factors should
therefore be taken as an indication of direct exposure to
competition.

(b) standard

business

to

business

parcel

services,

domestic and international;

Contract logistics

(c) standard business

to consumer parcel

services,

domestic and international;

(21) As stated in recital 9, contract

logistics, defined as
outsourced logistics and the associated data system ser-
vices/logistics application and consultation services, are
covered by Directive 2004/17/EC only to the extent
these services are being provided by entities which also
provide postal services within the meaning of its Article
6(2)(b). According to the available information, Finland
Post is the only such entity on this market in Finland. On
the market for contract logistics Finland Post's market
share is negligible as it amounts to barely 1 %. This
can therefore be taken as an indication of direct
exposure to competition.

Philatelic services

(22)

Beside Finland Post, which issues stamps in Finland (to
the exclusion of the Åland Islands), two other categories
of actors are active on the market for philatelic services:
stamp dealers and (stamp) auction houses. Finland Post's
share on the overall market
estimated market
for
philatelic
in Finland, whether provided by
services
dealers or auction houses, amounts to 50 %, whereas
the estimated aggregate shares of
the two biggest
stamp dealers on that market amounts to 20 % and
the estimated global share of the two largest auction
houses on the overall market amounts to 12 %. The
estimated aggregate shares of these four actors (32 %)
thus amount to more than half of that of Finland Post
(50 %). Furthermore,
rendered by stamp
dealers and auction houses are considered separately,
then the estimated aggregate market shares of the two
largest actors for each of these two categories amount to
the
substantially higher
estimated aggregate share is 55 % of the stamp-dealing
market and, for auction houses, the estimated aggregate
share is 75 % of the stamp auction market. These factors
should therefore be taken as an indication of direct
exposure to competition for philatelic services, whether
the market considered is the overall market or
the
separate stamp-dealing market and the stamp auction
market.

stamp dealers,

services

levels.

For

if

(d) express and courier parcel services, domestic and

inter-
national;

(e)

light goods services (also called single consignments)
and freight services;

(f) contract logistics;

(g) philatelic services.

(24)

(25)

Since the condition of unrestricted access to the market
is deemed to be met, Directive 2004/17/EC should not
apply when contracting entities award contracts intended
to enable the services listed in points (a) to (g) of recital
23 to be carried out in Finland, excluding the Åland
Islands, nor when design contests are organised for the
pursuit of such an activity in Finland.

This Decision is based on the legal and factual situation
as of February to May 2007 as it appears from the
information submitted by the Republic of Finland.
It
may be revised, should significant changes in the legal
or factual situation mean that
the conditions for the
applicability of Article 30(1) of Directive 2004/17/EC
are no longer met,

HAS ADOPTED THIS DECISION:

IV. CONCLUSIONS

(23)

In view of the factors examined in recitals 9 to 22, the
condition of direct exposure to competition laid down in
Article 30(1) of Directive 2004/17/EC should be
considered to be met in Finland, excluding the Åland
Islands, in respect of the following services:

Article 1

Directive 2004/17/EC shall not apply to contracts awarded by
contracting entities and intended to enable the following
services to be carried out
in Finland, excluding the Åland
Islands:

(a) unaddressed direct mail advertising;

(a) unaddressed direct mail advertising;

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(b) standard business to business parcel services, domestic and

(g) philatelic services.

international;

(c) standard business to consumer parcel services, domestic and

international;

Article 2

This Decision is addressed to the Republic of Finland.

(d) express and courier parcel services, domestic and inter-

national;

Done at Brussels, 6 August 2007.

(e)

light goods services (also called single consignments) and
freight services;

(f) contract logistics;

For the Commission

Charlie McCREEVY
Member of the Commission