Advances in Regulatory Economics series
Edited by Michael A. Crew and Timothy J. J. Brennan
Chapter 24: Transparency and non-discrimination in postal pricing
The purpose of this chapter is to examine transparency and non-discrimination in postal pricing in a liberalized postal market. The chapter aims at showing how transparency and non-discrimination can be of importance for securing sustainable competition in the sector, using insights from the current situation in Sweden. It also discusses postal law in the light of economic theory and competition law. Transparency and non-discrimination are two main concepts in postal price regulation in the European Union. The economic benefits to the postal operator, as well as to (the economic theory concept of) total welfare, of price discrimination under certain circumstances are well known (Crew and Kleindorfer, 2012). However, as concluded by Carlton and Perloff (1999, p. 280), the objective of price discrimination is to ëcapture as much consumer surplus as possibleí. Thus, policy assessment also involves protection of customers. Moreover, price discrimination may raise competition concerns, since it may facilitate selective predation by giving opportunities for the universal service provider (USP) to single out customers that are considering choosing a competitor, and give these customers specific discounts or pricing schemes in order to block out competitors (existing as well as possible entrants). It is uncontroversial that harmful types of price discrimination are less likely to occur, the more transparent the pricing system of the postal operator is. On the other hand, it should be recognized that non-transparency, for example secret discounts, can be beneficial in some cases as they may undermine cartels.
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