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Post Danmark (remedies concerning pricing scheme)

23. februar 2005

Journal nr. 1120-0289-0076/ISA/twa/chj The Council Meeting 23th February 2005

In February 2005, the Danish Competition Council approved the new pricing scheme of Post Denmark concerning the future prices for distribution of unaddressed items.

The Competition Council concluded that the new pricing scheme is fixed on objective criteria based on the underlying costs of the company. This was not the assessment of the Competition Council as regards the previous price system of the company.

This result makes ensure that the competitors of Post Danmark meet fair conditions on this market. The remedies ensure equal treatment of customers, acting as company groups, wholesale societies or competitors respectively. Competitors obtain access to distribution through Post Denmark on an equal level as other customers of the company. It is important for competitors in the market to be able to use the distribution network of Post Denmark in parts of the country that are not covered by the competitors themselves.

The remedies were put forward by Post Danmark following the decision of 29th September 2004 by the Competition Council. In that decision, the Competition Council concluded that Post Danmark had abused its dominant position by offering discriminatory prices and loyalty rebates. In addition, the pricing scheme did not treat customers in similar conditions equally.

The decision issued an order requiring Post Danmark to amend its prices and rebates. Post Danmark appealed this decision to the Danish Appeals Tribunal and sustain its appeal despite the fact that the company has had its future pricing scheme approved by the Competition Council. The remedies have therefore been offered independently of the pending appeal case. The Competition Council has made the remedies binding until end of 2006.

The new pricing scheme makes it possible to sustain intensive competition also in the future. The market for distribution of unaddressed items has become increasingly competitive in the last couple of years. The current case follows a complaint submitted by a competitor, Forbruger-Kontakt, last year.

For further information, please contact special advisor Carina Hilt Jørgensen (+45 72 26 81 30)