AGCM

PRESS RELEASE

Postal services:  Antitrust fines Poste over 39 million for abuse of dominant position

In 2007, Poste introduced practices designed to exclude competitors from the market for 'guaranteed time and date' delivery and messenger notification services, obstructing the growth and development of liberalized value-added services.

Poste Italiane is being fined 39,377,489 euros for having abused its dominant position by obstructing the development of liberalized markets for the services of 'guaranteed date and time' delivery and messenger notification. This was the Antitrust Authority's ruling at the end of an investigation that was launched in response to a complaint by TNT. The inquiry identified a series of Poste practices that were designed to exclude its competitors and weaken their competitive capacity.

According to due reconstructions, starting in 2007 Poste Italiane exploited its market power, which is based on the possession of an established network for traditional postal services, among other things, in order to enter  the markets for 'guaranteed time and date' services and messenger notification services. The corporation put a variety of practices into place for handling competitors' correspondence and, most significantly, applying predatory pricing by taking advantage of free access to its preexisting universal services network and making offers that its competitors could never match. Another goal of these behaviors, which converged into a single coherent strategy, was to retain its dominant position in the markets for bulk mail and notification services that utilized the postal service.

In the market for 'guaranteed time and date' services in particular, Poste Italiane first engaged in active denigration of TNT, its competitor, which had made major investments to build an 'alternative' network to launch its "Formula Certa" service. Poste applied a mechanism by which any of its competitors' correspondence which happened to be returned through the Poste network would be returned directly to the sender instead of to the competing operator. The return to sender, furthermore, was made contingent on full payment at the sender's expense (which it does not require of its own clients) even though the related services were not provided, otherwise Poste Italiane would be entitled to destroy the letters 10 days after the original notification.

After entering the free market for value-added services, Poste's next step was to adopt predatory pricing by offering the PostaTime service selectively to the same clients-senders (of competitors) who had been subject to the return procedures described above, offering lower costs by taking advantage of the existing universal services network.

The same predatory pricing strategy (using the integrated network to preserve the traditional postal service's dominant position) was also applied during the Comune di Milano and Equitalia tenders, which were opened in 2008 to contract the delivery of fines and administrative acts by means of notifier messengers and the 'guaranteed time and date' delivery service cited above:  Poste won the Comune of Milano tender and three of the four lots of the Equitalia tender.

The Antitrust Authority ordered an immediate halt to the abusive behaviors, and Poste Italiane has been granted three months to submit a report on the measures being adopted to remove these behaviors.

Rome, 15 December 2011