Wednesday, January 04, 2006

Germany Raises Postal Rates for EU Mail

To start off the New Year, the German Post (Deutsche Post) has raised the price for mailing letters from Germany to EU countries by ca. 27% (a monopolistic price increase), and we inquire below as to how this could happen.

See here for a .pdf list of old rates and new rates:
2006 Price List of the German Post (Deutsche Post)

The monopoly on the post in Europe goes back to the days of Thurn and Taxis and not much has changed in the interim.

Although the German Post was allegedly "liberalized" in 1989 (Postreform I) and 1994 (Postreform II), it still possesses a time-limited law-prescribed "exclusive license" (i.e. a monopoly) for the sending of letters up to a certain weight. This exclusive license was first granted to last until the end of 2002 and then was greedily extended by German law (Postreform III) to 2007, pursuant to a rather foolish exception provided for by EU Law:

"Directive" in English: EU Directive 2002/39/EC of the European Parliament and of the Council of 10 June 2002 amending Directive 97/67/EC with regard to the further opening to competition of Community postal services

"Richtlinie" in German: (Richtlinie 2002/39/EG des Europäischen Parlaments und des Rates vom 10. Juni 2002 zur Änderung der Richtlinie 97/67/EG im Hinblick auf die weitere Liberalisierung des Marktes für Postdienste in der Gemeinschaft).

(see here for this directive in all EU languages)

Here is our excerpted text of that Directive in English (we snip out a lot of the unnecessary garble and pedantic posturing that is included as a matter of course in European law texts):

"Directive 2002/39/EC of the European Parliament and of the Council of 10 June 2002
amending Directive 97/67/EC with regard to the further opening to competition of Community postal services

. . .

Article 1
Directive 97/67/EC is hereby amended as follows:


1. Article 7 shall be replaced by the following: "Article 7

1. To the extent necessary to ensure the maintenance of universal service, Member States may continue to reserve services to universal service provider(s) [LawPundit note: "universal service provider" is a fancy cloaked name for "monopolist"]. Those services shall be limited to the clearance, sorting, transport and delivery of items of domestic correspondence and incoming cross-border correspondence, whether by accelerated delivery or not, within both of the following weight and price limits. The weight limit shall be 100 grams from 1 January 2003 and 50 grams from 1 January 2006. These weight limits shall not apply as from 1 January 2003 if the price is equal to, or more than, three times the public tariff for an item of correspondence in the first weight step of the fastest category, and, as from 1 January 2006, if the price is equal to, or more than, two and a half times this tariff.

In the case of the free postal service for blind and partially sighted persons, exceptions to the weight and price restrictions may be permitted.

To the extent necessary to ensure the provision of universal service, direct mail may continue to be reserved within the same weight and price limits.

To the extent necessary to ensure the provision of universal service, for example when certain sectors of postal activity have already been liberalised or because of the specific characteristics particular to the postal services in a Member State, outgoing cross-border mail may continue to be reserved within the same weight and price limits.

2. Document exchange may not be reserved.

3. The Commission shall finalise a prospective study which will assess, for each Member State, the impact on universal service of the full accomplishment of the postal internal market in 2009. Based on the study's conclusions, the Commission shall submit by 31 December 2006 a report to the European Parliament and the Council accompanied by a proposal confirming, if appropriate, the date of 2009 for the full accomplishment of the postal internal market or determining any other step in the light of the study's conclusions.";

2. the following indents shall be added to Article 12: "- whenever universal service providers apply special tariffs, for example for services for businesses, bulk mailers or consolidators of mail from different customers, they shall apply the principles of transparency and non-discrimination with regard both to the tariffs and to the associated conditions. The tariffs shall take account of the avoided costs, as compared to the standard service covering the complete range of features offered for the clearance, transport, sorting and delivery of individual postal items and, together with the associated conditions, shall apply equally both as between different third parties and as between third parties and universal service providers supplying equivalent services. Any such tariffs shall also be available to private customers who post under similar conditions,

- cross-subsidisation of universal services outside the reserved sector out of revenues from services in the reserved sector shall be prohibited except to the extent to which it is shown to be strictly necessary to fulfil specific universal service obligations imposed in the competitive area; except in Member States where there are no reserved services, rules shall be adopted to this effect by the national regulatory authorities who shall inform the Commission of such measures.";

3. the first and second subparagraphs of Article 19 shall be replaced by the following: "Member States shall ensure that transparent, simple and inexpensive procedures are drawn up for dealing with users' complaints, particularly in cases involving loss, theft, damage or non-compliance with service quality standards (including procedures for determining where responsibility lies in cases where more than one operator is involved).

Member States may provide that this principle is also applied to beneficiaries of services which are:

- outside the scope of the universal service as defined in Article 3, and

- within the scope of the universal service as defined in Article 3, but which are not provided by the universal service provider.

Member States shall adopt measures to ensure that the procedures referred to in the first subparagraph enable disputes to be settled fairly and promptly with provision, where warranted, for a system of reimbursement and/or compensation.";

4. the third subparagraph of Article 22 shall be replaced by the following: "The national regulatory authorities shall have as a particular task ensuring compliance with the obligations arising from this Directive and shall, where appropriate, establish controls and specific procedures to ensure that the reserved services are respected. They may also be charged with ensuring compliance with competition rules in the postal sector."

5. Article 23 shall be replaced by the following: "Article 23
Without prejudice to Article 7, every two years, on the first occasion no later than 31 December 2004, the Commission shall submit a report to the European Parliament and the Council on the application of this Directive, including the appropriate information about developments in the sector, particularly concerning economic, social, employment and technological aspects, as well as about quality of service. The report shall be accompanied where appropriate by proposals to the European Parliament and the Council.";

6. Article 27 shall be replaced by the following: "Article 27
The provisions of this Directive, with the exception of Article 26, shall expire on 31 December 2008 unless otherwise decided in accordance with Article 7(3). The authorisation procedures described in Article 9 shall not be affected by this date."

Article 2

1. Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive no later than 31 December 2002. They shall forthwith inform the Commission thereof.
When Member States adopt these measures, they shall contain a reference to this Directive or be accompanied by such a reference on the occasion of their official publication. Member States shall determine how such reference is to be made.

2. Member States shall communicate to the Commission the texts of the main provisions of national law which they adopt in the field covered by this Directive.

Article 3

This Directive shall enter into force on the day of its publication in the Official Journal of the European Communities.

Article 4

This Directive is addressed to the Member States.

Done at Luxembourg, 10 June 2002.

. . .
"

The extension of the exclusive license granted to the Deutsche Post in Germany from 2002 to 2007 was unsuccessfully challenged as unconstitutional in the German Constitutional Court. (See the court's Press Release, and Decision: BVerfG, 1 BvR 1712/01 vom 7.10.2003, Absatz-Nr. (1 - 129), http://www.bverfg.de/entscheidungen/rs20031007_1bvr171201.html.)

The German Justices apparently saw no harm in the extension for another five years of the exclusive monopoly license which was originally granted to the Deutsche Post to cover the interim period - from monopoly to liberalization - under the rationale that such a monopolistic exception was required to guarantee full postal service to the public in the interim period.

The German Constitutional Court was unconvinced by the argument that the intent of the exclusive license was not to protect the public and its right to postal services but rather to reinforce the financial status of the Deutsche Post (which continues to bring in record monopoly profits).

Here is the text of what the German Constitutional Court issued as part of its press release on its judicial decision:

"§ 51 Abs. 1 Satz 1 PostG enthielt eine bis 31. Dezember 2002 befristete gesetzliche Exklusivlizenz für die Deutsche Post AG für die Beförderung von Briefsendungen und adressierten Katalogen bei einem bestimmten Einzelgewicht und Einzelpreis. Diese Befristung wurde im Jahr 2001 durch das Erste Gesetz zur Änderung des Postgesetzes bis zum 31. Dezember 2007 verlängert. Das Zweite Gesetz zur Änderung des Postgesetzes aus dem Jahr 2002 verpflichtet die Deutsche Post AG für den Zeitraum der gesetzlichen Exklusivlizenz zur Erbringung von Universaldienstleistungen. Darunter versteht das Postgesetz ein Mindestangebot an Postdienstleistungen wie insbesondere die Beförderung von Briefsendungen und adressierten Paketen eines bestimmten Maximalgewichts, die flächendeckend in einer bestimmten Qualität und zu einem erschwinglichen Preis erbracht werden. Das Dritte Änderungsgesetz aus dem Jahr 2002 sieht bis zum 31. Dezember 2005 die gesetzliche Exklusivlizenz für Sendungen bei einem Einzelgewicht bis 100 Gramm bei einem bestimmten Einzelpreis vor und reduziert die Exklusivlizenz für die anschließende Zeit bis 31. Dezember 2007 auf Sendungen eines Einzelgewichts bis 50 Gramm bei einem bestimmten Einzelpreis."

The German postal rates which have changed effective January 1, 2006 involve increases as large as 27% for standard letters sent from Germany to other European Union countries. These increases seem contrary to the entire mandate of the liberalization of the German postal service and are also contrary to the idea of a European Union in which postal rates should be equal for all, as they are e.g. among the several States in the USA.

Comments by others to the new postal rates can be read at:

Editor Bill at the Britboard

DDBug at ToytownMunich
.

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