European Commission upholds UPS charges of unfair competition against Deutsche Post

by Canadian Shipper

United Parcel Service (UPS) Canada Ltd. has applauded a European Commission (EC) decision which forces Deutsche Post AG (Deutsche Post) to repay 572 million euros plus interest ($843.7 million CDN) to the German government for using monopoly profits and receiving state aid to subsidize Deutsche Post’s commercial courier activities.

The EC decision, meanwhile, which was in response to a complaint filed by UPS, may have significant adverse implications for Canada Post, which faces a similar claim from UPS under the provisions of NAFTA.

Both Deutsche Post and Canada Post hold government granted monopolies for lettermail and both compete with private sector firms in the non-monopoly courier business.

“The EC’s decisions against Deutsche Post sends a clear message for other postal monopolies such as Canada Post that it is not acceptable for postal operations to use its lettermail monopoly to subsidize its courier business. The EC decision underscores an important principle that if postal monopolies are going to compete against the private sector they should compete fairly. These same principles form the basis of UPS’ NAFTA claim against the Government of Canada,” said Susan Webb, UPS Canada spokesperson.

The UPS NAFTA claim says the Government of Canada has failed to implement policies and measures that ensure Canada Post’s non-monopoly courier services compete fairly with the 1,400 private sector courier companies operating in this market. UPS contends that Canada Post competes unfairly in the courier marketplace by using benefits and privileges obtained from its monopoly over letter mail.

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