Postal Joint Ventures and EC Competition Law Considerations

Abstract

The highest growth rate in the international postal market is found in the value-added (also known as express) segment and the dominant players in this segment have hitherto been the so-called integrators, such as UPS and Federal Express, while the public postal operators (PPOs) have been struggling and continue to struggle to get a foothold in this important segment. The primary reason for the lack of competitiveness of the PPOs is the lack of integrated networks. In essence, the PPOs work on a bilateral basis, which excludes control over the production process, i.e., there is no end-to-end control. However, in the last few years, the attitude among the PPOs is changing. Surely some are staying independent but an increasing number opt either for a full marriage (so far not with each other but with private operators, e.g., Deutsche Post/DHL and Dutch Post/TNT) or for some sort of cohabitation more or less known to the market. In any case, it is against this background that Post Denmark, Finland Post, Norway Post, and Sweden Post (hereinafter collectively Parties) decided to join forces by creating a joint venture in the express delivery market temporarily called Vasagatan 11 International AB (Vasagatan). The purpose of this paper is to look at the various ways in which marriages and cohabitations in the postal sector— commonly alliances—are regulated under the European Community (EC) competition rules by the European Commission (Commission) by using the Parties’ experience in the Vasagatan joint venture as an illustration. This case was notified to the Commission in August 1997 as a full-function joint venture and is currently being reviewed by the Commission under Article 85 of the EC Treaty.

Kent Karlsson, Partner, Linidaters & Alliance, Brussels, who acted as joint counsel in the Vasagatan project and handled the notification of Vasagatan to the Commission in Brussels, has provided useful comments in the preparation of this article.