AGCM

Change the system of support for the publishing and non-profit industries by way of the decree-law enabling the 2008 Budget, now being examined in the Senate, eliminating the system of reduced postal rates that accords unjustified privileges to Poste Italiane.

This was the Italian Competition Authority's request in a submission to the Speakers of the House and Senate, to the Prime Minister and to the Ministers of the Economy and of Communications.

The Authority points out that Poste Italiane each year receives compensation for the discounted postal rates applied to published materials and non-profit mailings. This is a mechanism that clearly and seriously distorts competition: postal operators other than Poste Italiane are unable to offer competitive rates to publishers and non-profit entities for this type of service. Current regulations, then, effectively deprive the market of an activity that by rights is supposed to be liberalized.

In its submission, the Authority recalls that Article 10 Paragraphs 5-8 of decree-law no. 159 confirmed the mechanism of reduced postal rates, while reducing the compensation due to Poste Italiane. That law not only reaffirms a system that is in contrast with the laws protecting competition and the market, but also contradicts the proposed regulatory reform of the publishing industry.

In the Authority's view, then, urgent action is required in converting the decree into law to guarantee the right to choose one's supplier of postal services whether for the mailing of publishers' products or for mailings by non-profit associations.

The necessary support should be provided to operators in these two industries by way of tax relief calculated on the basis of their expenditure on postal services.

This latter solution is also contained in the bill on publishing recently agreed by Cabinet, though it is limited to subscription mailings of publications.

The suggested change represents a first indispensable step toward establishing undistorted competitive conditions in the postal industry, since it would allow operators who are already present in the marketplace and any new entrants to offer alternative services to those of the dominant operator.

The opening up of the market to competition should motivate businesses to become more efficient in distribution, with significant benefits in terms of increased levels of quality of service for consumers and greater demand for subscription publications, providing the basis for growth in the market.

Rome, 20 October 2007