Deutsche Post escapes threat of break-up

Date: 15/02/01

By Peter Chapman

COMPETITION officials will not demand the break-up of newly-privatised Deutsche Post when they punish the firm for breaking EU anti-trust rules.

Aides to European Commission anti-trust chief Mario Monti confirm they will take action "before Easter" against Deutsche Post for predatory pricing in the German parcel market. United Parcel Service (UPS), the US firm which brought the original complaint against the German postal giant, last year demanded a separation of the company's profit-making letters monopoly from its other units.

UPS EU affairs manager Anton van der Lande argues that a split would make it far more difficult for Deutsche Post to cross-subsidise other units, allowing them to charge below-market rates for their services.

But a Monti aide says the future structure of Deutsche Post - which has carried out a two-year campaign of acquisitions across the EU - is not under threat.

"I don't even think we could ask for that," he said. "We are looking at predatory pricing. That can be treated without structural remedies."

The official refused to confirm German press reports that the Commission was set to fine the company €100 million for its misdemeanours.

"This was pure speculation. Fines are set at the last minute and they depend on a lot of factors, for example if the company has cooperated with the Commission or not," he said.

Under Union rules the Commission is entitled to fine a company up to 10% of its annual turnover for anti-competitive behaviour. But it has never meted out such a heavy penalty.

Deutsche Post spokesman Norbert Schaefer said the firm, whose annual turnover last year was €7.6 billion, has set aside €25 million to pay fines levied by the Commission.

Competition officials will not demand the break-up of newly-privatised Deutsche Post when they punish the firm for breaking EU anti-trust rules.