Abstract
Access to the postal network has figured prominently in the regulatory debate as more and more operators are required to provide access to their postal network. Yet, guidance for operators and regulators on how to design access regimes that withstand a regulatory and competition review has to date been surprisingly limited. A faulty design of the pricing and non-pricing part of access can have negative implications for the postal operator’s (PO’s) profitability, for competition, for economic efficiency and ultimately the social welfare resulting from market outcomes.
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Notes
- 1.
Postal company represents any firm operating in the postal industry, without any regards on where it operates in the value chain.
- 2.
In this case, the postal company is considered in the value chain as an intermediary.
- 3.
In this case, the postal company also and/or only operates a postal network.
- 4.
The recent Post Danmark II judgement has raised the bar for an assessment of exclusionary abuse. According to the European Court of Justice (ECJ), depending on the characteristics of the market, even a less efficient competitor must be able to compete (Recitals 55–62).
- 5.
The ‘ladder of divestment’ refers to a situation where favorable access conditions incentivize network operators to compete based on access instead of investing in their own delivery capacity.
- 6.
One might theoretically consider that an access regime may be designed so that also less-efficient competitors can compete (cf. Post Danmark I). In practice, it is unclear under which market structures this would be a justifiable approach for postal markets, in terms of improvements to social welfare.
- 7.
Verizon Communications v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (2004).
- 8.
Id. at 412.
- 9.
This debate relates back to the ladder of divestment, see Sect. 1.
- 10.
See Bring Citymail in Sweden as an example.
- 11.
For instance, Sandd in the Netherlands.
- 12.
Recent case law suggests that the bar for assessing exclusionary conduct should be even higher in the sense that the USP’s behavior should not even prevent a less efficient competitor from competing, see Post Danmark II, Recitals 55–62.
- 13.
These effects may include: (i) restraining an operator in differentiating prices based on users’ price sensitivities, (ii) encouraging mailers to seek access directly, (iii) encouraging competitors to use access to serve only end-users with low price sensitivity, and (iv) setting retail prices higher can lead to losing customers with high price sensitivity.
- 14.
The definition of intermediaries includes any sender X that starts acting as an intermediary (consolidator), e.g. allowing any other company Y to get a PO’s quantity discount, “without having increased its volume of mailings”.
- 15.
“The principle of equal treatment, which is one of the fundamental principles of EU law, requires that comparable situations must not be treated differently, and different situations must not be treated in the same way, unless such treatment is objectively justified” (CJEU bpost case), recital 27.
- 16.
These cases involved the Belgian USP bpost and the French USP La Poste.
- 17.
- 18.
Conseil de la Concurrence, Opinion 07-A-17 of 20 November 2007, Recital 205.
- 19.
Conseil de la Concurrence, Opinion 07-A-17 of 20 November 2007.
- 20.
This has been explicitly postulated in the Opinion of Advocate General Sharpston, delivered on 16 October 2014, Recital 88.
- 21.
One form of loyalty-enhancing rebates are retroactive rebates, whereby customers obtain a discount on all the units purchased, if a certain threshold of purchases is met.
- 22.
Notwithstanding the legal certainty enshrined in the bright line criteria that the dominant company should inform its compliance upon a known quantity, i.e. its own costs, a rival may be excluded by a rebate based on how the rebate relates to the rival’s cost, not per se to the cost of the dominant firm (Brennan 2008).
- 23.
See also Commission Decision of 20 March 2001, Case COMP/35.1 41 Deutsche Post AG, OJ L1 25/27. §10 The Commission stated that Deutsche Post “must earn revenue on [the specific service open to competition] which at least covers the costs attributable to or incremental to producing that particular service”.
- 24.
A further factor for consideration is the economic effect of geographically differentiated prices (zonal pricing) in access, to which the same principles discussed in this paper should apply.
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Okholm, H.B., Basalisco, B., Wahl, J., Cerpickis, M. (2017). The Challenge of Designing Access to the Postal Network: An Economics Perspective. In: Crew, M., Parcu, P., Brennan, T. (eds) The Changing Postal and Delivery Sector. Topics in Regulatory Economics and Policy. Springer, Cham. https://doi.org/10.1007/978-3-319-46046-8_20
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