The antitrust concerns by at least three members of Congress may spark a Justice Department review of the U.S. Postal Service’s proposed strategic alliance with FedEx Corp.
So far Attorney General Janet Reno has not indicated if those concerns – raised by House Judiciary Committee Chairman Henry Hyde (R-IL), House Government Reform Committee Chairman Dan Burton (R-IA), and House Postal Subcommittee Chairman John McHugh (R-NY) – will lead to a review of the proposed alliance.
Hyde first raised the issue with Reno last month shortly after Postmaster General William J. Henderson confirmed that the USPS was negotiating with Memphis, TN-based FedEx to share express and ground deliveries.
Last week Burton and McHugh expressed their concerns in a letter to Reno. Although they noted that the postal service “enjoys complete immunity from antitrust laws” they questioned “whether such immunity is appropriate in the modern postal marketplace.”
They told Reno that if she chose investigate antitrust or anti-competitive issues involving the proposed alliance, she should examine the structure of the entire domestic postal delivery sector. They said this is because both public and private members may exert substantial domination in their chosen markets and may unfairly impose higher costs on consumers.
Under the proposed partnership, the postal service would use FedEx’s large jet fleet to transport Priority and Express mail at low rates. In return, the USPS would use its letter carriers to deliver residential FedEx packages weighing up to 70 pounds, but not its overnight parcels.
Last month Henderson defended the proposed alliance under intense questioning by McHugh and other postal subcommittee members.
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