Special Report pursuant to Sec. 44 of the Postal Law, Bonn, 7 December 2015

  • The Monopolies Commission finds stagnating competition in the postal sector – the dominant position of the Deutsche Post AG remains unchanged.
  • The Monopolies Commission calls for an immediate reform of the legal and regulatory framework and a full application of the existing regulatory framework.

The Monopolies Commission ("Monopolkommission") has submitted its 9th Special Report under Sec. 44 of the Postal Law today, bearing the title: „Post 2015: Immediate reform of the legal and regulatory framework – Now!" ("Postwendende Reform – Jetzt!"). The report analyses impediments to effective competition on the German letter and parcel markets and gives a number of recommendations on how to solve current problems on the political and administrative levels.

"Politicians und regulators have to set a signal for a more intensive competition on the postal markets", said the chair of the Monopolies Commission, Professor Daniel Zimmer. The best way to achieve that goal is to improve the legal and regulatory framework and to fully make use of the existing regulatory framework.

On the letter market, no competition has evolved so far. Deutsche Post AG still acts as a quasi-monopolist on the market for private letters and as a market-dominant player on the market for business letters, in particular, because it is the only player which owns an area-wide distribution network. On the parcel markets, a certain degree of competition can be observed, which is characterized by few parcel operators using their own distribution networks. Nevertheless, Deutsche Post AG also has substantial market power in the field of parcels. In the Monopolies Commission's opinion, digitalization provides opportunities to more intensive competition and to break into new markets.

"The federal state should solve the conflict of interests, arising from its double role as the regulator on the one hand and as a shareholder on the other, and should completely sell its shares in Deutsche Post AG", said the chair of the Monopolies Commission. Furthermore, the politically responsible persons, or Legislature respectively, should cut back soon Deutsche Post AG's privileges, such as the exclusive VAT-exemption for Universal Services and the potential to increase non-cost-based fees. In addition, it is advisable to extend the Federal Network Agency's power ("Bundesnetzagentur").

According to the Monopolies Commission, the existing regulatory framework provides potential to further improve the protection of both consumers and competition. Increases for letters postage could normally be lowered, for instance, if the Federal Network Agency calculates an adequate profit margin for a dominant company or Deutsche Post AG respectively based on firm-specific risks, as it had done previously, rather than based on profit margins of European postal operators, as it did in its latest decision in the price cap procedure ("Maßgrößenentscheidung") in November 2015.

Moreover, the Monopolies Commission recommends that the Federal Network Agency should modernize and effectivate the collection of data from dominant companies for regulatory purposes, implement an ex ante regulation of subservices charges, intensify its market monitoring, and increase its cooperation with the Federal Cartel Office ("Bundeskartellamt").

The following documents are now available for download: