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Compensation Fund Under EU Law: A Suitable Solution for the Postal Market?

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The Future of the Postal Sector in a Digital World

Part of the book series: Topics in Regulatory Economics and Policy ((TREP))

Abstract

As in the telecoms and electricity sectors, the EU Postal Directive allows Member States to set up compensation funds to finance universal service obligations (USO). Postal operators not responsible for the USO can be required to share the net cost of the USO.

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Notes

  1. 1.

    Directive 97/67/EC of 15 December 1997 on common rules for the development of the internal market of Community postal services and the improvement of quality of service, OJ L 15, 21.1.1998, p. 14, as last amended by Directive 2008/6/EC of 20 February 2008 amending Directive 97/67/EC with regard to the full accomplishment of the internal market of Community postal services, OJ L 52, 27.2.2008, p. 3.

  2. 2.

    State aid SA.35608 (2014/C) (ex 2014/N)—Greece, Hellenic Post (ELTA)—Compensation for the financing of the universal postal service, (2014) 5436 final of 01.08.2014.

  3. 3.

    Article 7(5) of the Postal Directive.

  4. 4.

    Communication from the Commission—European Union framework for State aid in the form of public service compensation (2011), OJ C 8, 11.1.2012, p. 15.

  5. 5.

    Directive 2002/22/EC of 7 March 2002 on universal service and users’ rights relating to electronic communications networks and services (Universal Service Directive), OJ L 108, 24.4.2002, p. 51.

  6. 6.

    Ibidem, Recital 4.

  7. 7.

    Article 13(3).

  8. 8.

    Recital 23.

  9. 9.

    Communication from the Commission, Universal service in e-communications: report on the outcome of the public consultation and the third periodic review of the scope in accordance with Article 15 of Directive 2002/22/EC, COM(2011)0795 final.

  10. 10.

    Article 14.

  11. 11.

    Directive 2009/72/EC of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC, OJ L 211, 14.8.2009, p. 55, Article 3(8).

  12. 12.

    Recital 49 of the Electricity Directive.

  13. 13.

    See, for example, Commission Decision of 28 January 2009 on aid implemented by Luxembourg in the form of the creation of a compensation fund for the organization of the electricity market (Case C 43/02 (ex NN 75/01), OJ L 159, 20.6.2009, pp. 11–20), on the establishment of a compensation fund to share the additional costs associated with the obligation to purchase “green” electricity between final consumers.

  14. 14.

    Directive 97/67/EC, cit.

  15. 15.

    Report from the Commission on the application of the Postal Directive, COM(2002)0632 final.

  16. 16.

    European Parliament resolution on the application of the Postal Directive (Directive 97/67/EC, as amended by Directive 2002/39/EC), 2005/2086(INI), 02.02.2006.

  17. 17.

    Commission Staff Working Document—accompanying document to the Report from the Commission on the application of the Postal Directive (Directive 97/67/EC as amended by Directive 2002/39/EC), COM(2008) 884 final, 22.12.2008.

  18. 18.

    Ibidem, p. 19.

  19. 19.

    Proposal for a Directive of the European Parliament and of the Council amending Directive 97/67/EC, COM(2006)0594 final.

  20. 20.

    Directive 2008/6/EC of 20 February 2008 amending Directive 97/67/EC with regard to the full accomplishment of the internal market of Community postal services. OJ L 52, 27.2.2008, p. 3.

  21. 21.

    The USO net cost is the difference between the net cost for a designated USP of operating with the USO and the same provider operating without it, taking into account, however, any intangible benefits.

  22. 22.

    Recital 27 of Directive 2008/6/EC.

  23. 23.

    Further indications are provided in Annex I, Part C.

  24. 24.

    Recital 25 of Directive 2002/39/EC of the European Parliament and of the Council of 10 June 2002 amending Directive 97/67/EC with regard to the further opening to competition of Community postal service, OJ L 176, 5.7.2002, p. 21.

  25. 25.

    With respect to the definition of interchangeable services, in 2008 the Commission excluded that hybrid mail services, i.e., services involving a communication electronically transmitted to the service provider, electronically processed and converted into a physical mail item delivered to the addressee, be considered interchangeable to the US (decision C(2008) 5912 final of 7 October 2008—Case COMP/39.562, confirmed by the General Court on 25 March 2015, Case T-556/08, Slovenská pošta v Commission, not yet published).

  26. 26.

    In this respect, Member States may require those providers called to contribute to a compensation fund “to introduce an appropriate accounting separation to ensure the functioning of the fund” (Article 14(10) of the Postal Directive).

  27. 27.

    Austria, Cyprus, Czech Republic, German, Denmark, Estonia, Greece, Spain, France, Croatia, Hungary, Italy, Luxembourg, Latvia, Malta, Poland, Portugal, Romania, Slovenia, Slovakia, the United Kingdom, Ireland.

  28. 28.

    Cyprus, Estonia, Italy, Slovakia (Wik-Consult 2013).

  29. 29.

    “The Role of Regulators in a More Competitive Postal Market”, cit., p. 124.

  30. 30.

    Article 10, Decreto Legislativo 22 luglio 1999, n. 261, GU n. 182, 5.8.1999, as subsequently modified. A Ministerial Decree of 17.04.2000 provides the criteria for the functioning of the fund.

  31. 31.

    Poste Italiane’s calculations.

  32. 32.

    Article 58(1), Act on Postal Services of 14.09.2011 (n.324/2011).

  33. 33.

    Vestník Úradu pre reguláciu elektronických komunikácií a poštových služieb—č. 5/2014 z 20.6.2014—Príjmy a výdavky kompenzačného fondu za rok 2013.

  34. 34.

    Competition policy brief “High quality and competitive postal services for citizens and businesses—State aid control in the postal sector”, Issue 6, May 2014.

  35. 35.

    Article 7(5).

  36. 36.

    Annex I requires a “transparent and neutral mechanism for collecting contributions.”

  37. 37.

    Proposal for a Directive of the European Parliament and of the Council amending Directive 97/67/EC (COM/2006/594 final), § 3.3.1.

  38. 38.

    Member States are allowed to designate different undertakings to provide different elements of USO and/or to cover different parts of the national territory.

  39. 39.

    Case C-340/99, TNT Traco SpA v. Poste Italiane SpA and others, [2001] ECR I-4109, § 58.

  40. 40.

    Article 8 acknowledges “the Member States’ right to organize the siting of letter boxes on the public highway, the issue of postage stamps and the registered mail service used in the course of judicial or administrative procedures in accordance with their national legislation.”

  41. 41.

    According to its conventional understanding, the proportionality principle consists of three tests applied to a given measure: the suitability, the necessity, and the proportionality stricto sensu test. The suitability test refers to the relationship between the means and the end (i.e., whether the chosen measure is suitable in order to achieve the given aim proposed to achieve by using the chosen measure); the necessity test implies assessing whether the chosen measure is necessary to achieve the proposed goal; the proportionality stricto sensu aims at checking whether the measure, while suitable and necessary, imposes an excessive burden.

  42. 42.

    See TNT Traco, cit., § 58: “Article 90(2) of the Treaty [now 106(2) TFEU] does not allow the total proceeds […] which are paid by economic operators […] to exceed the amount necessary to offset any losses which may be incurred in the operation of the universal postal service.”

  43. 43.

    Recital 25.

  44. 44.

    Case C-83/98 P, France v Ladbroke Racing and Commission [2000] ECR I-3271, § 50, and Case C-482/99 France v Commission, § 37.

  45. 45.

    Case T-358/94 Air France v Commission [1996] ECR II-2109, §§ 63–65.

  46. 46.

    Cases T-139-09, T-243-09, T-328-09, France v. Commission Contingency Plans.

  47. 47.

    ELTA opening decision, cit., §§ 122–123.

  48. 48.

    Case C-280/00, Altmark Trans GmbH and Regierungspräsidium Magdeburg v Nahverkehrsgesellschaft Altmark GmbH [2003] ECR-I-07747.

  49. 49.

    The fourth condition requires that “[w]here the undertaking which is to discharge public service obligations is not chosen pursuant to a public procurement procedure, the level of compensation needed must be determined on the basis of an analysis of the costs which a typical undertaking, well run and adequately provided with means to meet the necessary public service requirements, would have incurred in discharging those obligations, taking into account the relevant receipts and a reasonable profit for discharging the obligations.”

  50. 50.

    ELTA opening decision, cit., §§ 109–110.

  51. 51.

    Ibidem, § 115.

  52. 52.

    Commission Decision of 20 December 2011 on the application of Article 106(2) TFEU to State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest (notified under document C(2011) 9380), OJ L 7, 11.1.2012, p. 3.

  53. 53.

    Communication from the Commission—European Union framework for State aid in the form of public service compensation (2011), cit.

  54. 54.

    Notably, that the USO financed through the fund was a genuine SGEI; that ELTA had been entrusted with the operation of the SGEI by way of an official act specifying the public service obligations and the methods of calculating compensation; that the duration of the period of entrustment was justified; that ELTA’s accounting and cost allocation system was compliant with Directive 2006/111/EC; that the direct entrustment of ELTA as the USO provider was compatible with § 19 of the SGEI Framework and that, being the USO only assigned to ELTA, there could be not any discrimination in the sense of § 20 thereof; that the methodology used by the Greek authorities to calculate the compensation amount was in line with the requirements of the SGEI Framework, with no risk of overcompensation; that Greece had committed to comply with the transparency requirements under the SGEI Framework.

  55. 55.

    ELTA opening decision, cit., § 191.

  56. 56.

    See Footnote 1: “In practice, the percentage of contribution of a given operator on its turnover amounts to 0.5 % +0.5 %* [difference in percentage between the urban concentration of ELTA’s distributed items in the USO perimeter and the urban concentration of the operator]. For example, if ELTA offers 60 % of its services to urban areas, as soon as an operator distributes 79 % of its postal items in urban areas, its contribution is equal to 10 % of its turnover in the USO area.”

  57. 57.

    Ibidem, §§ 195–196.

  58. 58.

    Ibidem, § 198.

  59. 59.

    Ibidem, Footnote 50.

  60. 60.

    § 52.

References

  • Oxera (2007) Funding universal service obligations in the postal sector

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  • Wik-Consult (2013) Main developments in the postal sector (2010–2013)

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  1. FratiniVergano - European Lawyers, Brussels, Belgium

    Alessandra Fratini

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  1. Alessandra Fratini
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Correspondence to Alessandra Fratini .

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  1. Rutgers Business School, Rutgers University, Newark, New Jersey, USA

    Michael Crew

  2. School of Public Policy, University of Maryland Baltimore County (UMBC), Baltimore, Maryland, USA

    Timothy J. Brennan

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Fratini, A. (2016). Compensation Fund Under EU Law: A Suitable Solution for the Postal Market?. In: Crew, M., Brennan, T. (eds) The Future of the Postal Sector in a Digital World. Topics in Regulatory Economics and Policy. Springer, Cham. https://doi.org/10.1007/978-3-319-24454-9_11

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