§ Sir Teddy TaylorTo ask the Secretary of State for Trade and Industry (1) if he will make a statement on the decision of the European Commission to initiate inquiries into the handling of UK mail by the German Post Office, indicating the powers which the Commission possesses; [124764]
(2) what representations Her Majesty's Government have made to the Government of Germany about the handling of mail from the UK; and if he will make a statement; [124765]
(3) if he will make a statement on his policy in respect of the decision of the European Court of Justice on the German Post Office's entitlement to make additional 387W charges for re-mailed letters; and what assessment he has made of the impact of this decision on the Post Office. [124766]
§ Mr. Alan Johnson[holding answer 8 June 2000]This issue relates to the lack of clarity about what does and what does not constitute ABA re-mail which has led to a number of legal cases within Europe. ABA re-mail is mail sent from Country A to Country B for delivery to Country A. The problems have arisen because the way historically post offices have paid each other has not allowed them to fully recover the costs of delivering incoming mail.
In this context the British Post Office lodged a complaint with the European Commission in February 1998 into the alleged practice of Deutsche Post AG (DPAG) intercepting some international mail inward into Germany. The European Commission has now announced that it has completed an extensive investigation and in its preliminary assessment has concluded that, subject to any arguments DPAG may put forward in its defence, DPAG's practice abuses its dominant market position and restricts competition. The Commission has issued a Statement of Objections, which is a preliminary procedural document and not a final decision. It opens formal proceedings under EU procedural rules. It lists in detail the allegations against DPAG and includes the Commission's assessment of how DPAG infringes Article 82 of the EC Treaty. DPAG has full rights of defence and when these have been considered the Commission will finally decide whether a prohibition decision is necessary. If, following formal proceedings, the initial view of the Commission is confirmed, DPAG will be ordered to cease this behaviour. DPAG may then appeal the decision of the Commission before the European Courts.
I welcome the Commission's decision to investigate this case. Any infringement of competition rules or abuse of a dominant position is of concern. We were aware of the Post Office's complaint but have not made direct representations to the Germany Government as we were awaiting the Commission's views.
The case is one of a number of cases concerning remail. The recent decision of the European Court of Justice on the German Post Office's entitlement to make additional charges for re-mailed letters (in the case of DPAG v. GZS and Citicorp) allowed DPAG to charge bulk mailers the difference between the low rate it receives from the sending countries' postal authorities and the rate it would have received if that mail had been sent domestically within Germany. It did not address the issue of what kinds of items should be regarded as acceptable for ABA re-mail. It is this issue which the current investigation will address.
Also relevant is the recent rejection of the appeal by DPAG in the International Express Carriers Conference (the IECC) v. Commission against the judgment of the Court of First Instance which annulled the Commission's decision of 6 April 1995 that interceptions of commercial ABA re-mail did not constitute an abuse within the meaning of Article 86 (now 82) of the EC Treaty. The rejection of the appeal does not mean that Deutsche Post, or other European Post Offices, are entitled to intercept commercial physical ABA re-mail. Equally there is no ruling that it may do so. I hope the current investigation will clarify matters.