Leg. Dev.: Community Postal Services

4 Colum. J. Eur. L. 683 (1998)

Nyaguthii Chege.

After several months of discussion and consultation, the European Parliament and Council adopted Directive 67/97 of the European Parliament and of the Council of 15 December 1997 on common rules for the development of the internal market of Community postal services and the improvement of quality of service, a detailed directive deregulating the Community’s postal services and establishing a timetable for the full liberalization of direct mail and cross-border mail services) Intended to create a common market in postal services, the Directive establishes rules to ensure greater harmonization, provides gradual and controlled liberalization of the market, and ensures all users a universal postal service throughout the Community. As required by Article 189b of the EC Treaty, the joint text was developed by the conciliation committee representing both the European Parliament and the Council, and was adopted with approval from  the Parliament by a majority vote and by a qualified majority in the Council.

The purpose of the Directive is to establish common rules concerning the provision of a Community-wide universal postal service; the criteria by which certain services may be reserved for universal service providers and the conditions governing the provision of non-reserved services; tariff principles and transparency of accounts for universal service provision; the establishment of quality standards for universal service provision and a system to ensure compliance with those standards; the harmonization of technical standards; and the creation of independent national regulatory authorities (Article 1).

The postal services sector is an important industry. It employs 1.8 million people within the Community, generates about 1.3% of the Community’s GNP and handles approximately 80 billion items mailed by European Union citizens annually. The Directive’s main critics claim that it immunizes universal postal service from normal EU competition criteria when, according to the Directive, applying the normal competition rules “would impede the performance of this service.” Leading the critics are the private postal firms operating in the non- reserved letter and package delivery service who are particularly concerned about “cross-subsidization.” They allege that national post offices and other monopoly holders within the Member States “use opaque accounting methods which allow them to subsidize their non-reserved delivery services with revenues from their monopoly on letter delivery.” In its final form, the Directive addresses this concern as discussed in detail below. Although the text of the Directive does not explicitly refer to cross-subsidies, it does require the universal service providers to maintain clear and separate accounting systems for reserved and non-reserved services.