UPS wins battle against Deutsche Post over monopoly status

United Parcel Service (UPS) of Canada applauded a recent European CommisionÔÇÖs ruling forcing Deutsche Post AG $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.

UPS said in a news release that the EC decision, which was in response to a complaint filed by UPS, has significant adverse implications for Canada Post, which faces a similar claim from UPS under the provisions of NAFTA.

ÔÇ£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,ÔÇØ said the release. ÔÇ£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.ÔÇØ

This is the second decision from the EC against Deutsche Post in response to a complaint by UPS. The earlier decision effectively prohibited Deutsche Post from using monopoly lettermail profits to cross-subsidize Deutsche Post’s competitive courier operations. This week’s decision prohibits Deutsche Post from using state funds to compete against private businesses.

The UPS NAFTA claim is about what UPS claims is the Government of Canada’s failure 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.