09 August 2000

A formal anti-trust inquiry has been launched by the European Commission into allegations that Deutsche Post has abused its dominant position in Germany, employing predatory pricing tactics to eliminate competition in the mail order parcels market.

This latest probe supplements two other EC investigations into Germany’s state-owned postal service: alleged receipt of illegal state aid and the disruption of international mail by imposing surcharges on incoming cross-border post.

According to the EC, initial inquiries indicate that Deutsche Post gave substantial discounts to large mail order groups in return for routing all their parcels via its service. Furthermore, alleges the EC, its investigations suggest “that Deutsche Post does not come anywhere near covering the costs of its mail order parcel services," thus preventing private providers of parcel services to mail-order firms from gaining “any firm foothold in Germany”.

Deutsche Post yesterday described itself as “calm” about the charges, insisting that they can be disproved. It was equally unfazed at suggestions that the inquiry might prejudice its forthcoming flotation. This is expected within the next few months when the postal giant will sell up to 49% of its shares at a price that would value the business at between €20 billion and €40bn ($18bn - $36bn).

News source: Financial Times