The European Commission will extend its probe into allegations that some of Europe’s largest postal services are financing international expansion programs with the profits from their monopoly operations, according to reports in Europe.
Officials of the EU would not publicly disclose the names of the individuals or companies leveling the charges. A spokesperson for the EU would only say, “a number of complaints are being looked into.”
The allegations are similar to those leveled against the U.S. Postal Service in recent years by United Parcel Service and Federal Express, its major competitors in the parcel delivery business. Most European postal services, like the USPS, have a monopoly over the delivery of letters weighing up to 350 grams (about 12.4 ounces).
The USPS has steadfastly denied claims that it is using the profits from its monopoly services, the delivery of addressed first class and advertising mail, to subsidize other classes of mail and a variety of expanded services, ranging from package delivery to programs for electronic commerce.
According to published reports here and abroad, the governments of the 13 EU countries, will soon be asked to file detailed financial reports about their postal operations with Frits Bolkestein, the EU’s Single Market Commissioner. The same information was sought earlier in the year by Mario Monti, the EU’s competition commissioner, who is investigating complaints of alleged cross subsidization of postal services in Germany, Italy, and the Netherlands.
Bolkestein was quoted in the Financial Times as saying that an examination of those financial reports “will give us an opportunity to see whether there are any hidden forms of financing.”
Separately, the EU is considering proposals that would require such monopoly postal operators to levy Value Added Tax on some services in which they compete with private companies. The proposal, one part of review of current VAT practice in the EU, is aimed at leveling competition in areas where state monopolies compete with commercial firms.
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