Updated on 23 May 2018
Few markets have developed as rapidly and inconsistently, and in such a short period, as the post and parcels markets, both in the Netherlands and abroad.
The Dutch postal market has been deregulated since the Postwet (Postal Act) entered into force on 1 April 2009. That deregulation allowed other companies to enter the postal market. Several companies have now made use of that possibility and are competing with PostNL.
Other interesting developments have also occurred (see in that regard also the Post and Parcels Monitor 2016 of the Netherlands Authority for Consumers and Markets (“ACM”)). Whereas the postal market has shown significant drops in volume for many years now, the opposite holds true for the parcels market. The increasing popularity of e-commerce and online shopping has led to an ever increasing number of parcels that need to be delivered. In some cases that is done by parties that also deliver post.
The deregulation of the Dutch postal market has several advantages. Consumers can now choose, for instance, between PostNL’s traditional stamp and the cheaper Sandd stamp. But the fact that post and parcels are no longer delivered only by PostNL has also given rise to debate. In the Dutch Lower House, for instance, the question has been raised several times whether it would not be better (in light of the decrease in volume and for environmental reasons) to opt for a model in which the post and parcels of several postal carriers are collected at local hubs, from which the last-mile delivery can be organised.
Parcels
The dynamics of the postal and parcels markets also regularly give rise to conflicts. A case in point is the legal action taken by Shops United against PostNL this past year. Shops United acts as an agent between webshops and parcel carriers. Shops United’s services primarily relate to the delivery of parcels by small and medium-sized webshops to consumers. However, Shops United believed that PostNL had excessively increased its parcel carriage prices. That increase allegedly made it more difficult for Shops United to retain its customers. The Court agreed with Shops United and ordered PostNL to reverse the rate increase. Shops United has now been taken over by PostNL. Like MyParcel, a former competitor of Shops United, it now forms part of the PostNL group.
The shops that accommodate postal agencies of PostNL have taken legal action against PostNL in the past already. The reason was the (major) reduction by PostNL of the fees that it paid the shops. That reduction (apparently from 25% to 40%) hit a nerve at the Association of Postal and Banking Retailers (“VVP”), which instituted preliminary relief proceedings on behalf of the retailers. According to the VVP, PostNL was abusing its dominant position by unilaterally reducing the fees. In the VVP’s opinion, that conflicted with Section 24 of the Mededingingswet (Competition Act) and Article 102 of the TFEU. But the preliminary relief judge of the Court of The Hague ruled that the interest involved was insufficiently urgent and disallowed the VVP’s claims on that ground.
Universal Postal Service
The conflicts between postal carriers also relate to sectors that are not yet competing but that nevertheless impact those that are. PostNL is still the only provider, for instance, of (time-critical) consumer post (the universal postal service or universal service obligation “USO”). PostNL is compensated for those services by the income from the sale of stamps. Interesting legal proceedings are currently pending against the ever increasing price of stamps. The price of a stamp has increased since 2010 from 44 cents to 83 cents as at 1 January 2018. A competitor of PostNL, Sandd, has filed an appeal. In those appeal proceedings Sandd argued that PostNL was “overcompensated” by the proceeds that it generates by the sale of its stamps. In Sandd’s opinion that overcompensation gave PostNL a competitive advantage over Sandd. The Court of Rotterdam ruled (partly) in favour of Sandd, on the grounds that, in the Court’s provisional opinion, the return to which PostNL is entitled does not lead to rates geared to cover the costs of delivery, as required under the European Postal Services Directive. The Rotterdam Court saw reason to request the European Court of Justice to issue a preliminary ruling in order to clarify various standards set in the Postal Services Directive. Those proceedings will most likely be continued before the European Court of Justice this year. The outcome will be awaited with a great deal of interest: if it is established that PostNL is being overcompensated, it will also be an established fact that consumers have overpaid for stamps for many years.
Another possible consequence of the ever increasing price of stamps is the government’s announcement in the coalition agreement that it intends to investigate whether a tendering procedure for the USO is preferable to the current model, in which PostNL has been designated as the USO provider and is compensated for those services. In 2017 already, a report by Rebel and KWINK was published in which the USO was evaluated. The conclusion in the report was that the policy steps in the past few years had been insufficient to safeguard the future of the USO. As an earlier report by WIK had found, there is a significant risk of the USO rates increasing further due to decreasing volumes. That will increase the pressure on the affordability of the USO, which could lead to a downward spiral on the postal market. The ever increasing cost of stamps would then result in a further drop in the number of consumers and companies that send letters.
Ex-ante regulation of 24-hour business post
The market analysis decision on 24-hour post and its legitimacy will also be clarified this year. In that decision, the ACM obligates PostNL to give competing postal carriers access to its network. That allows competing postal services providers also to provide 24-hour postal services. PostNL must furthermore provide that access at regulated rates. Several parties, including PostNL, have appealed the decision.
European developments
A number of interesting developments are also expected at a European level. The European Postal Services Directive, for instance, is being evaluated for the first time since the overall deregulation of the postal markets in Europe (see also the letter from the State Secretary for Economic Affairs and Climate). The Postal Services Directive served as a basis for the deregulation of the national postal markets in the European Member States and furthermore sets out a minimum quality level for the USO for all the Member States. According to the State Secretary, the initial preparations for the revision of the Postal Services Directive has already commenced. Although the outcome is uncertain (and is not expected until 2019), it is in any event likely that the changes to the Postal Services Directive as a result of this evaluation will have a major impact on the current national postal laws in Europe.
Finally, the Regulation on cross-border parcel delivery services entered into force on 22 May 2018. That Regulation forms part of the overall sector study by the European Commission into e-commerce and the Digital Single Market (see for more background information this blog, this blog and this website). The objective of the Regulation is twofold: on the one hand it is intended to create price transparency, since it obligates all providers of parcel delivery services that collect, sort, carry or distribute parcels to publish their rates for domestic and cross-border parcel delivery services. That obligation would allow small and medium-sized e-retailers to compare prices of parcel carriers. On the other hand the Regulation obligates national regulatory authorities to check whether the rates charged by parcel delivery service providers under the USO (PostNL in the Netherlands) are unreasonably high.
This blog has been co-written by Mr B. Braeken (who, as of 15 July 2019, no longer works at Maverick Advocaten).
