Table of Contents

Multi-Modal Competition and the Future of Mail

Multi-Modal Competition and the Future of Mail

Advances in Regulatory Economics series

Edited by Michael A. Crew and Paul R. Kleindorfer

This compilation of original papers selected from the 19th Conference on Postal and Delivery Economics and authored by an international cast of economists, lawyers, regulators and industry practitioners addresses perhaps the most significant problem that has ever faced the postal sector – electronic competition from information and communication technologies. This has increased significantly over the last few years with a consequent serious drop in mail volume.

Chapter 3: Postal Price Regulation in a Competitive Environment

Ralf Wojtek and Martin Zauner

Subjects: economics and finance, competition policy, public sector economics


Ralf Wojtek† and Martin Zauner‡ 02 03 1 INTRODUCTION With full liberalization of the postal markets the focus of price regulation shifts from ex ante price setting to detecting and preventing abuses in the liberalized market. While the dominant provider may still be subject to some price regulation, particularly with respect to consumers and the Universal Service Obligation (USO), it must be able to meet the new competition particularly in the field of business mail, parcels and express products. For this reason postal regulations in some countries, for example, Germany, have limited the ex ante price regulation to consumer mail whereas all other mail and all parcel products are subject only to ex post abuse control by the regulatory agency and the national and EU antitrust authorities. Since the Universal Service Provider (USP) generally retains its dominant position even after full liberalization it is subject to the general constraints relating to the commercial behavior of a dominant undertaking. The main provision in this context is Article 102 TFEU (formerly the EC Treaty). As competition increases the special provision for public undertakings (Article 106 TFEU, formerly Article 86 EU) becomes of less importance if universal service – or a large part of it – is rendered not only by the USP but also by a number of its competitors. As liberalization is progressing we observe more market-oriented pricing policies followed by the USPs, mostly in the areas of business mail and parcels. A typical tool employed by USPs is the widespread use of...

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