UPS WELCOMES EC RULING AGAINST DEUTSCHE POST

UPS WELCOMES EC RULING AGAINST DEUTSCHE POST    As expected, United Parcel Service has welcomed the European Commission’s decision that the German postal and logistics group Deutsche Post AG, must repay 572 million euro ($543 million) in state aid used to subsidize its parcel service.
   UPS, a rival of Deutsche Post and of its affiliate DHL Worldwide Express, had lodged complaints with the European Commission against the anti-competitive activities of the German group in Europe. UPS has also petitioned the U.S. Department of Transportation to withdraw the operating licenses of DHL Airways, the U.S.-based express company in which Deutsche Post has a stake. The DOT has refused to cancel the licenses of DHL.
   The European Commission decision on the refund of state aid “is a victory for fair competition and customer choice,” said Anton van der Lande, vice president, UPS public affairs international. “We expect the necessary controls to be implemented to prevent further illegal state aid for Deutsche Post or any other postal operator,” he added.
   UPS said that the latest decision on the illegal use of state subsidies “complements the European Commission’s March 2001 ruling against Deutsche Post on abuse of a dominant position.”
   In March, the European Commission fined Deutsche Post 24 million euro ($21.6 million), finding that the German postal carrier abused its dominant position by granting rebates, in addition to engaging in predatory pricing for its parcel services. As a result of the EC ruling, Deutsche Post, which holds a monopoly over German postal service, created a separate entity for business parcel services.
   The original state aid complaint, which led to the order to repay state aid, concerned Deutsche Post’s domestic German parcel market.
   “However, the principles of the ruling should also apply to Deutsche Post’s international commercial activities and its recently acquired express and logistics subsidiaries, including DHL,” UPS said.
   UPS said that it will file the EC decision with the U.S. Department of Transportation as part of the department’s ongoing review of the relationship between Deutsche Post and DHL Airways.