August 02 2012
The Competition Authority has confirmed its 2009 decision that former government postal service monopolist PostNL did not abuse its position on the Dutch postal service market. Competitor Sandd had complained to the authority that PostNL had engaged in predatory pricing practices by giving its subsidiary Netwerk VSP 'free' use of its network.(1)
The authority relied on the European Commission's guidance on abusive exclusionary conduct(2) to conclude that PostNL's network had not been used at prices below cost price. The authority did admit, however, that there may not be a level playing field in the postal market, given PostNL's vast network that was built up during its time as a government monopolist. According to the authority's chairman, this can be dealt with only once additional regulatory powers are bestowed on the Authority for Consumers and Markets – to be achieved on January 1 2013 through a merger between the authority, the Independent Post and Telecommunications Authority and the Consumer Authority (for further details please see "United we stand: a merger of three regulators").
The authority had already rejected Sandd's claim of abuse of dominance by PostNL in 2009. Sandd had claimed that the free use of PostNL's network by its subsidiary Netwerk VSP distorted competition on the postal market. In its investigation, the authority (re)examined the costs incurred by PostNL and its subsidiary Netwerk VSP for the provision of its postal services to Netwerk VSP. The authority rejected Sandd's claim that the remuneration paid by Netwerk VSP for the use of PostNL's network was the decisive factor in establishing predation, since PostNL constituted an economic unit with its subsidiary. Given that the average price charged by Netwerk VSP was above long-run average incremental costs, the authority concluded – in line with European Commission guidance on abusive exclusionary conduct – that there was no evidence of abuse and rejected Sandd's complaint.
However, the authority's chairman, Chris Fonteijn, stated in the accompanying press release that a level playing field in the postal market may be lacking. Since the authority's 2009 decision, which had already highlighted this flaw, no improvements have been made to resolve this issue. However, there is some hope: the state secretary of economic affairs, agriculture and innovation is considering whether to introduce additional regulatory legislation aimed at removing potential obstacles to effective competition on the postal market. Fonteijn added in this regard that:
"If the regulator, which is currently the Independent Post and Telecommunications Authority, and soon the Netherlands Authority for Consumers and Markets, is given additional powers to regulate the postal market, it will be able to develop a customised approach, which would make it easier to deal with market problems more effectively".
For further information on this topic please contact Jolling De Pree or Erik H Pijnacker Hordijk at De Brauw Blackstone Westbroek by telephone (+31 70 328 53 28), fax (+31 70 328 53 25) or email (firstname.lastname@example.org or email@example.com).
(2) Guidance on the commission's enforcement priorities in applying Article 82 of the Treaty Establishing the European Community (now Article 102 of the Treaty on the functioning of the European Union) to abusive exclusionary conduct by dominant undertakings, OJ 2009, C45/7, available at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2009:045:0007:0020:EN:PDF.
ILO provides online commentaries as specialist Legal Newsletters. Written in collaboration with over 500 of the world's leading experts and covering more than 100 jurisdictions, it delivers individually requested information via email to an influential global audience of law firm partners and international corporate counsel. Please click here to register for the service.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
ILO is a premium online legal update service for major companies and law firms worldwide. In-house corporate counsel and other users of legal services, as well as law firm partners, qualify for a free subscription. Register at www.iloinfo.com.