Article 3
This decision is addressed to the French Republic. Done at Brussels, 23 October 2001. For the Commission Mario Monti Member of the Commission (1) In their memo to the Commission dated 4 February 2000, p. 1, the French authorities refer to "the real interlinking of the different tasks necessary for the swift and cost-effective treatment of bulk mail". (2) See memo from the French authorities dated 4 February 2000, p. 1, and letter from La Poste dated 18 December 1998, p. 2; see also L'Analyse des relations contractuelles entre La Poste et les routeurs, Tera Consultants, 2 February 2000, p. 9, report forwarded to the Commission by La Poste. (3) On this concept, see the Green Paper on the development of the single market for postal services (COM(91) 476 final, 11.6.1992), Glossary, p. 367, where mail preparation firms are described as "intermediaries". (4) OJ C 39, 6.2.1998, p. 2, points 1 and 2.5. (5) This type of arrangement cannot, however, be described as a subcontracting relationship: La Poste does not in any way act as a principal, and items are delivered to post offices at the initiative of the mail preparation firms. (6) There are also two other types of technical contract: a quality contract, under which the quality of the work is remunerated according to a number of criteria (adherence to specified posting dates, accuracy of sorting, compliance with rules on filling of postbags, etc.) and a presentation contract, which remunerates quality, along the lines of the above, but also the degree of sorting performed. (7) Using a narrower definition, the abovementioned report L'Analyse des relations contractuelles entre La Poste et les routeurs puts total turnover on the mail preparation market at FRF 4,8 billion in 1998. The disadvantage of this estimate is that it completely disregards the flow of business correspondence, some of which is handled by mail preparation firms (see below). (8) Source: Routeurs ou prestataires de services - Synthèse de l'étude réalisée par le cabinet GBC à la demande de La Poste, June 2000. (9) Laser printing mail preparation firms, which have in fact integrated message handling using computerised data into their traditional mail preparation operation, should not be confused with laser printing firms in the strict sense which are not engaged in any mail preparation activity. According to the complainant, laser printing mail preparation firms handle around one third of the total flow of business correspondence entrusted to specialised service providers, with "pure" laser printing firms accounting for the rest. (10) In the abovementioned study carried out for La Poste, the IT marketing surveys and advisory consultancy GBC draws the following distinctions between mail preparation firms: bundling firms, which perform exclusively mail sorting and preparation tasks on behalf of La Poste; integrators, which offer a more or less extensive range of services in the direct marketing field, from market surveys to the management of mailings; parcelling firms that are subsidiaries of the large mail-order companies; specialised mail make-up firms that have developed know-how in fields related to mail preparation (binding, finishing, glueing, addressing, enveloping or plastic wrapping, etc.); generalist mail preparation firms operating at national or local level; laser printing mail preparation firms; mail preparation firms dealing mainly in parcels; etc. (11) Such as the Mailev@ service launched in 2000, which performs tasks ranging from the printing of documents and envelopes to the introduction of the finished items into the postal network. (12) Statement made at a meeting between La Poste and the Commission's Directorate-General for Competition held in Brussels on 17 January 2000. (13) Via its holding company Sofipost (50 % of the shares in Mikros) and jointly with Steria and the Italian company Postel (41 % of the shares). (14) Mikros employed 250 people and generated turnover of FRF 170 million in 1999. The company offers a number of services ranging from document formating to the enveloping and making up of postal items. (15) In 1998 Dynapost was awarded "top quality mail preparation firm" status by La Poste. This quality label, which was created in 1994 but abandoned in 1999, rewarded mail preparation firms meeting certain quality criteria and gave access to special technical conditions and scales of charges, in particular remuneration paid by La Poste for the provision of security in respect of prepayment. (16) In particular, in its letter of 18 December 1998 setting out its comments on the content of the complaint, La Poste disputes solely the existence of a "direct link" between the mail preparation business and, on the one hand, its "contrat Kiosque" service and, on the other hand, the activities of its subsidiary Médiapost. This Decision does not include those two operations in the description of the presence of the La Poste group on the mail preparation market. (17) See point 1 of this Decision. (18) The turnover in the relevant services achieved by La Poste and the subsidiaries concerned totalled nearly FRF 800 million in 1999. This is to be compared with the value of the mail preparation market, estimated in the abovementioned studies at between FRF 4,8 billion and FRF 6,4 billion. (19) Law No 90-568 of 2 July 1990 on the organisation of the public postal and telecommunications service (French Official Gazette of 8 July 1990). (20) Decree No 90-1214 of 29 December 1990 om the service obligations of La Poste and the postal and telecommunications services code (French Official Gazette of 30 December 1990, p. 16578), as amended by Decree No 93-775 of 26 March 1993 (French Official Gazette of 30 March 1993, p. 5718), Decree No 96-1022 of 27 November 1996 (French Official Gazette of 29 November 1996, p. 17336) and Decree No 2001-122 of 8 February 2001 (French Official Gazette of 10 February 2001, p. 2203). (21) Memo from the French authorities dated 4 February 2000, points 2.12 and 2.1.4, and notification dated 23 February 2001 of Decree No 2001-122 of 8 February 2001 amending the service obligations of La Poste. (22) Under Article 33(1)(a) of the service obligations of La Poste as amended by the Decree of 8 February 2001, "the charges for services forming part of the universal service provided to users must take account of costs". (23) In their letter to the Commission dated 17 July 2001, section 2.1.1, p. 9, the French authorities regard sorting operations as forming part of the universal service: "sorting is therefore an activity that does form part of the universal service (...)". (24) The Postimpact rates chiefly concern direct mail items and account for the bulk of the business of mail preparation firms. (25) As far as mail preparation firms are concerned, these rates apply only to flows of business correspondence and are therefore less important than the Postimpact rates. (26) According to the French authorities (letter to the Commission dated 17 July 2001), "the sorting dimension of mail preparation can be analysed as an activity forming part of the universal service (...)". They do not, however, maintain that in the case in point the remuneration of the services concerned is monitored from the standpoint of cost orientation. (27) Under Article 1 of Decree No 97-710 of 11 June 1997 on the powers of the Minister for Economic Affairs, Finance and Industry, the latter is "responsible for (...) - the policy on postal and telecommunications services". The Secretary of State for Industry exercises the powers of the Minister for Economic Affairs, Finance and Industry in the postal sector only by way of a delegation of authority issued by the Minister to whom he reports (see Article 1 of Decree No 2000-306 of 7 April 2000 on the powers delegated to the Secretary of State for Industry). The departments of DiGITIP are furthermore clearly placed under the authority of the Minister for Economic Affairs, Finance and Industry by Article 2(II) of Decree No 97-710. (28) Decree No 93-1272 of 1 December 1993 on the organisation of the central administration of the Ministry of Industry, Postal and Telecommunications Services and External Trade (French Official Gazette of 2 December 1993), as amended by Decree No 98-879 of 2 November 1998 (French Official Gazette No 255 of 3 November 1998, p. 16576). (29) In their memo to the Commission dated 4 February 2000, pp. 5 and 6, the French authorities stress the role played in the Ministry by the Treasury directorate in the management of the State's assets as a shareholder. Article 4 of the Order of 3 November 1998 organising the Treasury directorate into a number of offices (French Official Gazette No 255 of 3 November 1998, p. 16595) makes office D5 of the directorate's holdings department responsible for examining "issues relating to the financing of other enterprises in which the State has an interest, in particular (...) La Poste" and for "relations between those enterprises and the State as a shareholder, and transactions affecting their capital"). (30) French Official Gazette No 255 of 3 November 1998, p. 16583. (31) Decree of 18 November 1998 (French Official Gazette No 269 of 20 November 1998, p. 17524). The head of the postal services department, who has authority over the abovementioned two subdirectorates, is authorised to sign on behalf of the minister for economic affairs, finance and industry any instruments, orders, decisions or agreements concerning postal matters, but only in the event of the director-general being absent or prevented from attending to this duties (Decree of 19 April 2000 delegating authority to sign documents, French Official Gazette No 95 of 21 April 2000). (32) Memo from the French authorities dated 4 February 2000, p. 6, fifth paragraph. (33) It will be remembered that, on the French authorities' own admission, this supervisory function involves the task of enhancing the value of the State's assets and holdings (memo from the French authorities dated 4 February 2000, p. 6, third paragraph). (34) One of the technical contracts described above, which allows bundling. (35) This booklet addressed to La Poste's commercial agents was concerned with the development of Dynapost. (36) Étude qualitative des grands émetteurs de courrier et de leur réaction face à l'offre de courrier hybride de La Poste, 20 January 1993, annexed to the SNELPD complaint lodged with the French Competition Board. (37) Point 1.4 of the abovementioned reply from the French authorities. (38) Point 2.1 of the abovementioned reply from the French authorities. (39) In particular, the complainant's statement that its "kiosque" service is a mail preparation service and the criticism of its Médiapost subsidiary, which, according to La Poste, develops computer systems for, inter alia, addressing and targeting of mail but does not compete with mail preparation firms. (40) Point I A) of the abovementioned reply from La Poste. (41) See section 1.1.2. (42) Page 6 of the abovementioned reply. (43) Page 8 of the abovementioned letter. (44) The French authorities claimed that the French legal and institutional balance was consistent with the spirit of Article 22 of the Postal Directive (European Parliament and Council Directive 97/67/EC 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). This argument is not discussed in this Decision since the Commission took the opportunity to draw the French authorities' attention to the possible incompatibility of France's existing regulatory and institutional set-up with Article 22 of the Postal Directive by letter of 3 August 2000 in separate proceedings. (45) Analyse des relations contractuelles entre La Poste et les routeurs, report referred to above. (46) See Case C-18/88 RTT v GB-Inno-BM [1991] ECR I-5941, point 20, and Case C-320/91 Corbeau [1993] ECR I-2533, point 12. (47) Law No 90-568 of 2 July 1990 on the organisation of the public postal and telecommunications service (French Official Gazette of 8 July 1990, p. 8069), as last amended by Article 126 of the 1999 Finance Law of 30 December 1998 (French Official Gazette of 31 December 1998, p. 20050). (48) Article 1 of the 1990 Law. (49) Article 10 of the 1990 Law. (50) Under Article 7(1) of European Parliament and Council Directive 97/67/EC 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, "clearance" is the first stage of those services which may be reserved for the universal service provider. It is defined in Article 2(4) as "the operation of collecting postal items deposited at access points". Access points are defined in Article 2(3) as "physical facilities, including letter boxes provided for the public either on the public highway or at the premises of the universal service provider, where postal items may be deposited with the public postal network by customers". (51) As amended by Article 19(I) of Law No 99-533 of 25 June 1999 laying down guidelines for sustainable regional development and amending Law No 95-115 of 4 February 1995 laying down guidelines for regional development (French Official Gazette of 29 June 1999, p. 9515). (52) These are of course cases in which the mail items in question fall below the weight limits and prices laid down by the French rules. According to the abovementioned GBC study carried out on La Poste's behalf, page 3, note 7, "20 to 30 % of items made up by mail preparation firms are not distributed by La Poste" because they are not covered by its monopoly. (53) See, inter alia, judgment of 23 April 1991 in Case C-41/90 Höfner v Macrotron [1991] ECR I-1979, point 28; judgment of 18 July 1991 in Case C-260/89 ERT [1991] ECR, I-2925, point 31; judgment of 19 May 1993 in Case C-320/91 Criminal proceedings against Paul Corbeau [1993] ECR I-2538, point 9; judgment of 10 December 1991 in Case C-179/90 Merci convenzionali porto di Genova SpA v Siderurgica Gabrielli SpA [1991] ECR I-5889, point 14; judgment of 17 July 1997 in Case C-242/95 GT-Link A/S v De Danske Statsbaner (DSB) [1997] ECR I-4453, point 35; judgment of 12 February 1998 in Case C-163/96 Criminal proceedings against Silvano Raso and others [1998] ECR, I-533, point 25. (54) Judgment of 9 November 1983 in Case 322/81 NV Nederlandsche Banden-Industrie-Michelin v Commission [1983] ECR 3461, point 28; judgment of 5 October 1994 in Case C-323/93 Société civile agricole du Centre d'insémination de la Crespelle v Coopérative d'élevage et d'insémination artificielle du département de la Mayenne [1994] ECR I-5077, point 17; judgment of 26 November 1998 in Case C-7/97 Oscar Bronner GmbH & Co. KG v Mediaprint Zeitungs- und Zeitschriftenverlag GmbH & Co. KG and others [1998] ECR I-7791, point 36. (55) Notice from the Commission on the application of the competition rules to the postal sector and on the assessment of certain state measures relating to postal services, OJ C 39, 6.2.1998, p. 7, point 2.6. (56) Judgment of 13 December 1991 in Case C-18/88 RTT v GB-Inno-BM [1991] ECR I-5941, points 24 and 25; judgment of 19 March 1991 in Case C-202/88 French Republic v Commission [1991] ECR, I-1223, point 51; judgment of 27 October 1993 in Joined Cases C-46/90 and C-93/91 Procureur du Roi v Lagauche and others [1993] ECR I-5284, point 44. (57) [1991] ECR I-5941, point 25. (58) Points 25 and 26. (59) Points 23 and 24. (60) Letter of 18 December 1998, cited in section 1.5. (61) It should also be pointed out that this procedure has not been in force since 1999. (62) See point 1.3.1. (63) In practice, scrutiny of the Postimpact rates seems to relate essentially to the absolute level of charges and not to the relevance of the volume thresholds giving access to the levels in this scale of charges. (64) The "catalogue" rates, which also affect the operations of SNELPD members, are also submitted to the minister for information purposes only since they relate to mail items which are not correspondence items covered by La Poste's exclusive rights. However, this Decision is not concerned with the procedures for monitoring these rates since La Poste is not the only partner available to mail preparation firms for the transport and distribution of such mail items. (65) See recital 23. (66) This draft itself follows on from a preliminary draft decree amending the service obligations of La Poste, a copy of which had been sent in February 2001 and which was not developed further. (67) These are powers of ex ante scrutiny of price aspects of La Poste's commercial offers (especially standard contracts) for access to its reserved services. The draft presented to the Commission does not change the current profile of commercial offers that are subject to scrutiny. Although it explicitly treats contracts negotiated with homogenous business categories as standard contracts, it does not change the current rule under which only standard contracts relating to reserved services are subject to ex ante scrutiny. (68) In this situation, the mail preparation firms constitute users of the postal network. (69) In this situation, the mail preparation firms constitute suppliers of La Poste. (70) This situation could cover cases where mail preparation firms constitue suppliers of La Poste or cases where they constitute users of its network. (71) In this respect, the draft decree presented in July 2001 does not go as far as was announced by the French authorities in their reply of 4 February 2000. At the time, the French authorities expressly stated that, under the future decree, standard contracts (whatever their subject matter) "would be subject to approval by the ministery"; they also included technical contracts in the concept of "standard contract" (memo of 4 February 2000, point 2.2.1). (72) These cover preparation and sorting services that fall partly under La Poste's universal service, but are in no way part of its reserved area. (73) For product contracts falling under the universal service (such as Postimpact) on the other hand, the arrangements under the draft decree do ensure that the ombudsman's opinion is followed by a decision by the supervisory authority. (74) See also the judgment of 27 October 1993 in Case C-69/91 Criminal proceedings against Decoster [1993] ECR I-5335, point 19. (75) Point 6.4 of the notice cited in footnote 55. (76) See Commission letter of 27 October 1999, p. 9. (77) Memo from the French authorities dated 4 February 2000, p. 6, third paragraph. In the third paragraph on p. 5 of the same memo, it is also stated that "the budget directorate and the Treasury directorate responsible for managing the State's assets are also involved, each where it is concerned and within the limits of its mandate". (78) In points 16, 17 and 22 of Decoster, cited above, the Court found that the different directorates of a single authority could not be regarded as independent of each other for the purposes of Articles 82 and 86 of the Treaty. It is all the more true that the mixing within the same directorates under the authority of one and the same minister of monitoring and state asset management tasks prevents these tasks being performed independently of one another. (79) According to point 1.2.1 of the French authorities' memo of 17 July 2001, "the ombudsman and his immediate colleagues fall expressly under the legislative and regulatory provisions restricting and submitting to a check for regularity their possibilities for employment in private firms at the end of their terms of office" (emphasis added). The French authorities are probably referring to Decree No 95-168 of 17 February 1995 on the carrying on of private activities by civil servants who have been released from active service or have definitively ceased their duties (French Official Gazette No 43 of 19 February 1995, p. 2717). However, this decree does not cover activities in a public undertaking. No provision seems to be made as regards the possibility of the ombudsman or his colleagues joining La Poste at the end of their terms of office, which could affect their neutrality in the performance of their tasks. (80) Judgment of 13 December 1991 in Case C-18/88 RTT v GB-Inno-BM [1991] ECR I-5941, points 23 and 24; Case C-163/96 Criminal proceedings against Silvano Raso and others [1998] ECR I-533, points 27 and 31. (81) From 6 million to 30 million. (82) This type of contract is considered by mail preparation firms to be the most advantageous of the technical contracts, as it allows the bundling of mailshots. (83) There were only 27 preparation contracts at the end of 1999 compared with 58 prior to the decisions described. (84) Routeurs ou prestataires de services - Synthèse de l'étude réalisée par le Cabinet GBC à la demande de La Poste, June 2000. On p. 2, we read: "If we exclude from the financial analysis mail order preparers, which come out best, operating margins in other mail preparation segments fluctuated in 1998 between 2 % and 4 %, and net margins between 0 % and 2 %". (85) Datapost's large deficit over a number of successive years is evidence of the reality of this advantage. (86) A letter to department managers from La Poste's director of mail dated 17 September 1999 is evidence of the awareness of these problems: "The various audits conducted recently on conditions of operation and billing for services related to the mail service (collection and delivery, franking on behalf of third parties, enveloping, addressing) clearly identified inconsistencies between national and local instructions, resulting in a certain lack of uniformity of operating arrangements or even pricing. This situation means that La Poste is running serious risks with regard to competition law (...)". (87) Certain forms of behaviour described by the SNELPD in its 1998 complaint, in particular the discrimination practised, seem to have originated in initiatives by certain department managers at La Poste with a view to optimising volumes. The abovementioned letter of 17 September 1999 was written precisely to discipline such practices. (88) See judgment of 1 February 1978 in Case 19/77 Miller v Commission [1978] ECR 131, point 15, and paragraph 48 of the opinion of Advocate General Jacobs prior to the judgment of 23 April 1991 in Case C-41/90 Höfner v Macrotron [1991] ECR I-1979.