Article 4
This Decision is addressed to the Federal Republic of Germany. Done at Brussels, 19 June 2002. For the Commission Mario Monti Member of the Commission (1) OJ C 306, 23.10.1999, p. 25. (2) OJ C 306, 23.10.1999, p. 25. (3) Postverfassungsgesetz of 8 June 1989, BGBl. 1989, part I, p. 1026. (4) OJ L 125, 5.5.2001, p. 27. (5) Annex 4 to the German authorities' letter of 16 September contains the purchase contract and proof of actual payment of the purchase price by DPAG. (6) According to the German authorities, the principle of continuity of existing liability requires that a transfer of assets to a new legal entity does not worsen the legal position of existing creditors. This would be the case if a transfer of assets were to deprive existing creditors of a debtor. This principle applies independently of the fact that the entity taking over the assets becomes a new debtor. (7) As of 1924, the postal operator's assets were legally separated from the general budget, see German authorities' letter of 25 April 2002, p. 6. (8) Postumwandlungsgesetz of 14 September 1994, BGBl. 1994, part I, p 2339. Section 1 of this Act transforms the former Deutsche Bundespost into three share companies, Deutsche Post AG ("DPAG"), Deutsche Telekom AG ("DTAG") and Deutsche Postbank AG ("Postbank AG"). (9) Postverfassungsgesetz of 8 June 1989, BGBl. 1989, part I, p. 1026. (10) Article 1(2) of the Postal Organisation Act. (11) Article 65(2) of the Postal Organisation Act stipulated that the successor entity to DBP was to maintain all services previously offered by DBP. (12) Annex 5 to the German authorities' letter of 16 September 1999. (13) German authorities' letter of 25 April 2000, Annex 11a. (14) Article 4(1) of the Postal Organisation Act sets forth the obligation to maintain the requisite infrastructure in order to provide monopoly services and 'mandatory services' (Infrastrukturdienste). (15) Business secret. (16) Annex 5 to the German authorities' letter of 16 September 1999, pp. 5 and 6, and letter of 31 January 2002, p. 4. (17) Annex 5 to the German authorities' letter of 16 September 1999, p. 5. Confirmed by the German authorities' letter of 31 January 2002, pp. 4 and 5. (18) See section I, describing the allegations of UPS and BIEK. (19) While the over-the-counter service is not reserved, its provision requires a nationwide network of postal counters. DPAG currently operates approximately 14000 post offices throughout Germany. No private undertaking can match this network and, in consequence, there are no private undertakings which supply a nationwide over-the-counter parcel service. (20) DPAG's reserved letter-mail services, on the other hand, operate largely through a separate dedicated infrastructure. (21) The cost data supplied on 12 March 2002 were based on a series of assumptions, such as the integration of B-to-B collection and mail-order delivery rounds or the total outsourcing of all sorting activities, measures which were never implemented in practice. The Commission therefore requested the German authorities to submit data on the organisation of the parcel freight infrastructure as organised in practice and actually feasible. (22) German authorities' letter of 25 April 2002, p. 2; see also German authorities' letter of 12 March 2002, p. 12. (23) German authorities' letter of 25 April 2002, p. 1. (24) German authorities' letter of 12 March 2002, p. 54. It should be noted that, due to holidays, there are not five delivery days in all 52 weeks of the year. The experts thus agree that parcels are collected on 250 days per year. (25) German authorities' letter of 12 March 2002, p. 12: collection of B-to-B and mail-order return parcels is conducted via joint collection rounds (emphasis added). (26) The cost of a B-to-B collection is based on the following premises: a dedicated B-to-B collection round involves two containers, which is equivalent to a lorry plus trailer (German authorities' letter of 25 April 2002, p. 1). (27) Cost per B-to-B collection round as indicated by German authorities' letter of 25 April 2002, p. 2. (28) German authorities' letter of 25 April 2002, p. 1 specifying that all rounds previously indicated as integrated B-to-B collection and delivery rounds are in reality pure collection rounds on the one hand and pure delivery rounds on the other. This corrects the earlier submissions of 12 March 2002, according to which a part of the B-to-B collection rounds were integrated with B-to-B delivery rounds. The rounds that were previously identified as combined B-to-B collection and delivery rounds thus have to be separated and added to the pure B-to-B collection rounds, which for 1994 yields the following result: [...] pure B-to-B collection rounds + [...] former integrated collection and delivery rounds = [...] pure collection rounds. On the other hand, the pure collection rounds that were formerly identified as integrated collection and delivery rounds cover only [...] km and thus generate half the cost of the pure B-to-B collection rounds. (29) The B-to-B collection and delivery rounds that were previously presented as combined rounds only comprise, when presented individually, [...] km per round and generate half the cost of a B-to-B collection round; DPAG, 24 May 2002. (30) German authorities' letter of 25 April 2002, page 2. This corrects an earlier submission according to which the average B-to-C collection round covers [...] kilometres; see German authorities' letter of 12 March 2002, Annex 1, p. 18. (31) German authorities' letter of 12 March 2002, pp. 18 and 44. (32) Three major mail-order customers have traditionally pre-sorted their parcels and catalogues according to delivery district. These parcels, about [...] % of all mail-order parcels and catalogues (estimate given in the German authorities' letter of 12 March 2002, Annex 1, p. 23), were picked up and transported directly to the inbound parcel freight centre. This so-called direct transport, which is part of the long-distance transport activity, is discussed below. (33) Cost per B-to-C collection round as submitted in the German authorities' letter of 25 April 2002, p. 2. The cost data submitted on 25 April 2002 correct earlier data submitted on 12 March 2002. The earlier data, based on a price of DEM [...] to be paid per kilometre to a subcontractor, would have yielded a price of DEM [...] per B-to-C collection round. However, as no undertaking has ever achieved the successful provision of a mail-order parcel service involving several hundred million parcels annually on a 100 % sub-contracting basis, round costs calculated on this basis as a hypothesis of the cost situation with 100 % sub-contracting are not sufficiently reliable. (34) Contrary to what was stated in the initial study of 12 March, parcels are in reality collected from [...] premises, not [...] premises. Therefore, the amount of B-to-C collection rounds attributable to the mail-order segment as indicated in the study of 12 March has to be multiplied by [...]. (35) Less than [...] % of mail-order parcels, on account of their bulky format, require manual sorting. (36) Less than [...] % of B-to-B parcels, on account of their bulky shape, require manual sorting. This percentage of bulky parcels that require manual sorting is significantly below the percentage of bulky B-to-B parcels transported by private competitors. According to information supplied by the German authorities, this lower percentage is due to the fact that DPAG offers B-to-B parcels up to 31,5 kg, see German authorities' letter of 16 September 1999, p.7. On the other hand, private competitors offer B-to-B parcels either themselves or in cooperation with freight logistics providers with a weight up to 75 kg. It is mostly the parcels exceeding the threshold offered by DPAG (31,5 kg) that require manual sorting as they cannot be processed on the sorting machines. (37) German authorities' letter of 12 March 2002, Annex 1, p. 13. (38) German authorities' letter of 12 March 2002, Annex 1, p. 10. (39) German authorities' letter of 12 March 2002, Annex 1, p. 20. The capital, operating and materials cost of a parcel freight centre dedicated to door-to-door activities has been calculated on the basis of a maximum of [...] million units a year, of which [...] % must meet a deadline of E + 1 (24 hours). The actual current parcel freight centre network of DPAG has a peak capacity of around [...] million units a year. Mail-order returns and mail-order catalogues are excluded from the E + 1 deadline, as these are not timesensitive and are therefore processed in the parcel centres outside the usual processing schedules (German authorities' letter of 12 March 2002, Annex 1, pp. 8 and 10). (40) German authorities' letter of 12 March 2002, Annex 1, p. 45. (41) German authorities' letter of 12 March 2002, Annex 1, p. 45. (42) German authorities' letter of 12 March 2002, Annex 1, p. 10. (43) Total "door-to-door" volume from 1994 to 1999 as calculated by Ctcon, Segmentserfolgsrechnung nach Vollkosten, 15.1.2000 (submitted by the German authorities on 31 January 2002) developed as follows: 1994: [...] million units; 1995: [...] million; 1996: [...] million; 1997: [...] million; 1998: [...] million; 1999: [...] million. For all years the total volume includes the "mail-order return" parcels, that are considered as an annex to the "door-to-door" mail-order business as they are an integral part of DPAG's offer to the mail-order companies. Their consideration at the sorting stage is justified as there is no operational difference in treatment between a mail-order parcel and a mail-order return parcel at this stage. (44) The number of attributable delivery points is based on the information supplied in the German authorities' letter of 12 March 2002, Annex 1, p. 17. (45) DEM [...] per delivery base × [...] delivery bases = DEM [...] for [...] delivery bases; see German authorities' letter of 12 March 2002, Annex 1, p. 49. (46) German authorities' letter of 12 March 2002, pp. 45, 47, and 49. (47) German authorities' letter of 25 April 2002, p. 3. (48) [...] h per year × 33 freight centres = [...] h; see German authorities' letter of 12 March 2002, Annex 1, p. 45. (49) [...] h for 33 freight centres per day × 250 working days = [...] h; see German authorities' letter of 12 March 2002, Annex 1, p. 47. (50) German authorities' letter of 12 March 2002, Annex 1, p. 49. (51) German authorities' letter of 25 April 2002, p. 3. This corrects the hourly labour cost submitted on 12 March 2002, Annex 1, p. 49 which reflected wages that are presumed to have to be paid to subcontractors for taking over the entire sorting activity. However, as sorting activities have never been subcontracted - no undertaking was named as actually having had a volume comparable to DPAG's ([...] million parcels a year) sorted and transported solely through subcontractors - there is no practical example of the feasibility of a subcontracting model on this scale. The German authorities accordingly submitted new figures on 25 April 2002 based on DPAG's real labour costs. (52) All 33 freight centres are built and equipped to the same design. They all have a dual function, serving as inbound and outbound freight centres concurrently. (53) German authorities' letter of 25 April 2002, p. 3. (54) German authorities' letter of 16 September 1999, Annex 95/1, p. 12 and German authorities' letter of 25 April 2002, p. 3. (55) German authorities' letter of 25 April 2002, p. 3. (56) German authorities' letter of 12 March 2002, Annex 1, p. 14 and 23. (57) German authorities' letter of 12 March 2002, Annex 1, p. 46. (58) German authorities' letter of 12 March 2002, Annex 1, p. 46. (59) Cost per round as submitted by German authorities' letter of 25 April 2002, pp. 3 and 4. This later estimate deviates from the earlier submission of 12 March 2002, Annex 1, pp. 24 and 46, according to which a subcontractor, from 1994 to 1998, would have earned DEM [...] per kilometre x [...] km = DEM [...] per round. (60) German authorities' letter of 12 March 2002, Annex 1, p. 23. (61) German authorities' letter of 12 March 2002, Annex 1, p. 15. (62) German authorities' letter of 25 April 2002, p. 4. (63) Cost per round as submitted by German authorities' letter of 25 April 2002, pp. 3 and 4. (64) Data on attributable rounds as submitted by German authorities' letter of 12 March 2002, Annex 1, p. 46. (65) German authorities' letter of 25 April 2002, p. 4. (66) The German authorities corrected their earlier assumption that regional transport rounds were only conducted five days a week; cf. German authorities' letter of 12 March 2002, Annex 1, p. 48. (67) German authorities' letter of 12 March 2002, Annex 1, p. 17. (68) German authorities' letter of 12 March 2002, Annex 1, p. 48. (69) German authorities' letter of 12 March 2002, Annex 1, p. 48 (70) Cost per round as submitted by German authorities' letter of 25 April 2002, p. 4. (71) German authorities' letter of 12 March 2002, Annex 1, pp. 15, 36 and 48. (72) German authorities' letter of 12 March 2002, Annex 1, p. 15. (73) German authorities' letter of 12 March 2002, Annex 1, p. 15. (74) A dedicated B-to-B delivery round covers, according to DPAG, a distance of [...] km and thus generates half of the cost of a pure B-to-B collection round; DPAG, 24 May 2002. (75) As mentioned above, the German authorities' letter of 25 April 2002, p. 1, specified that all rounds previously indicated as integrated B-to-B collection and delivery rounds are in reality pure collection rounds. This corrects the earlier submissions of 12 March 2002, according to which there were pure B-to-B and mail-order return collection rounds on the one hand and integrated B-to-B collection and delivery rounds on the other hand. As mentioned above, the rounds indicated as integrated B-to-B collection and delivery rounds must thus be attributed solely to the B-to-B collection rounds on the one hand and dedicated business parcel delivery rounds on the other. (76) German authorities' letter of 12 March 2002, Annex 1, p. 15. (77) German authorities' letter of 12 March 2002, Annex 1, p. 15. (78) German authorities' letter of 25 April 2002, p. 2. (79) As discussed under the heading "long-distance transport" above, the remaining [...] % of mail-order return parcels are delivered by means of direct transport, German authorities' letter of 12 March 2002, Annex 1, p. 15. (80) Cost per round as submitted by the German authorities' letter of 25 April 2002, p. 2. (81) German authorities' letter of 12 March 2002, Annex 1, p. 67. (82) German authorities' letter of 12 March 2002, Annex 1, p. 67. (83) German authorities' letter of 16 September 1999, Annex 93/2, p. 5. (84) German authorities' letter of 25 April 2002, p. 5. This corrects the earlier assumption that standard delivery only takes place during five days a week and that [...] parcels may be delivered in an urban standard delivery round and [...] parcels in a rural standard delivery round (see German authorities' letter of 12 March 2002, pp. 27, 28 and 49). In the 25 April 2002 letter, at p. 5, the German authorities correct these earlier assumptions and indicate that, in reality, urban and rural rounds cannot be distinguished with the requisite level of clarity. Thus, an average of [...] parcels per standard delivery round was chosen. The later assumption of [...] parcels is also in line with BIEK's assumption that around [...] parcels are delivered in one standard delivery round; BIEK, 23 May 2002, p. 2. (85) German authorities' letter of 16 September 1999, Annex 93/2, p. 5 (86) The volume of B-to-B parcels that are delivered on dedicated business customer delivery rounds have to be subtracted from the amount of parcels delivered via standard delivery rounds. (87) Cost per round as submitted by the German authorities' letter of 25 April 2002, p. 5. These data differ from the round costs of an "efficient logistical network" for the operation of a door-to-door parcel delivery infrastructure submitted on 12 March 2002, Annex 1, p. 59. According to these earlier assumptions, 100 % of standard delivery rounds could be subcontracted to third-party undertakings. These subcontractors could be remunerated at rates of between DEM [...] per hour (1994) and DEM [...] (1999). On the assumption that up to [...] parcels could be delivered per urban round by these third parties, a round would last approximately [...] h. Thus, the cost per urban round would amount to between DEM [...] (1994) and DEM [...] (1999). However, the German authorities have not submitted any empirical evidence that a volume of [...] parcels per round could really be delivered under a 100 % sub-contracting arrangement. Nor is there any empirical example of a door-to-door delivery infrastructure that could deliver several million parcels a year (in 1999, DPAG transported some [...] million door-to-door parcel deliveries, see footnote (41) if all delivery rounds were subcontracted across the national territory. The figures presented by the German Government in the letter of 25 April 2002 are more in line with the conclusions of a study conducted by Dornier in October 1990 for Deutsche Bundespost Postdienst. In this study, Dornier assumes, for the years 1989/1990 that a standard delivery round generates cost of DEM [...] plus [...] per kilometre driven between the delivery point and the actual delivery district (Dornier, p. 16). According to Dornier, driving time between delivery points and delivery districts does not exceed [...] hours per round at an average speed of [...] km per hour (Dornier, p. 20). Average cost per round is thus [...] hour × [...] km per hour = [...] km per day. [...] km per day × DEM [...] per kilometre = DEM [...] per round. Average cost of a delivery round in 1990 is thus DEM [...] + [...] = DEM. (88) According to the estimates submitted by the German authorities, DPAG, contrary to the trend in other stages of the process chain, managed to decrease the cost of a standard delivery round. The German authorities attribute these cost savings to three factors: (1) lowering the labour costs at the delivery stage; (2) reduction in the number of delivery staff and delivery vehicles by better planning of delivery rounds through use of information technology; with resulting savings in delivery staff and vehicles, (3) use of cheaper delivery vehicles. (89) German authorities' letter of 12 March 2002, Annex 1, p. 27. (90) German authorities' letter of 31 January 2002, Annex 5 Segmentserfolgsrechnung 1990-2000. Mail-order parcel volume is counted without the mail-order return deliveries which, as mentioned above, are not delivered as part of the standard delivery rounds. (91) Postdienst-Pflichtleistungsverordnung of 12 January 1994, BGBl. 1994, part II, p. 86. (92) German authorities' letter of 16 September 1999, p. 10. (93) OJ L 15, 21.1.1998, p. 14. (94) German authorities' letter of 16 September 1999, p. 13. (95) According to the German authorities (letter of 16 September 1999, page 18), the term "burdens of the past" is supposed to designate the atypical costs of DPAG as compared with the costs of an undertaking operating under normal market conditions. According to the German authorities, it is precisely these "burdens of the past" which produce the deficit in the parcel freight operations that has been identified in the decision to initiate proceedings. (96) German authorities' letter of 1 February 2000, page 20; see also the German authorities' letter of 16 September 1999, p. 18. (97) DPAG only delivers, on average, [...] parcels per stop, while it alleges that competitors deliver at least 1,8 to 1,9 and up to 2,1 parcels per stop; document Ergebnisbelastungen DPAG, 1995, p. 7, submitted by the German authorities by letter of 19 November 1997. (98) German authorities' letter of 16 September 1999, p. 13. (99) German authorities' letter of 21 June 2000, Annex 1. (100) BIEK, letter of 22 November 1999, p. 2. (101) According to BIEK, the losses are structural because if private competitors were to operate the DPAG parcel freight infrastructure comprising 33 sorting centres and 476 delivery bases, they would incur comparable losses. (102) BIEK, letter of 22 November 1999, p. 3 at paragraph 3. (103) [2001] ECR I-9067, at paragraphs 20 and 22. (104) I.e. the net additional costs incurred in discharging a public service obligation; see the opinion of Advocate-General Tizzano in Case C-53/00, paragraph 60. (105) Case C-53/00, paragraph 27. (106) Corrected version submitted by letter of 2 June 2000. (107) Corrected version submitted by letter of 2 June 2000. (108) According to the data supplied by the German authorities by letter of 2 June 2000 (corrected version submitted by letter of 12 January 2001), the reserved area, from 1990 to 1998, generated an aggregate profit of DEM [...] million. In the same period, competitive services contributed net revenue of DEM [...] million. This necessarily implies that an amount of at least DEM [...] million of the abovementioned total deficit of DEM [...] million was not covered either by revenue from the statutory monopoly or by revenue from competitive services. (109) German authorities' letter of 16 September 1999, p. 18. (110) For a list of these burdens, see II.(G) above. (111) German authorities' letter of 16 September 1999, p. 18. (112) Article 2(1) of the Ordinance defines parcels and packets as containers whose weight does not exceed 20 kg and whose dimensions do not exceed 120 cm in length, 60 cm in width and 60 cm in height. (113) According to the German authorities, the applicable tariffs as set by the competent minister are reflected by the tariff schedules published by DPAG. According to these schedules, the affordable tariff for the lowest parcel weight category (up to five kilograms) for over-the-counter parcels available to the general public in the period 1994 to 1995 was DEM 7,60. In 1996, the lowest weight category was limited to parcels up to two kilograms. The affordable price from 1996 to 1998 was DEM 9,00. (114) Case C-53/00, paragraph 27. (115) On the contrary, a reimbursement, be it partial, through State resources of costs indispensable to the maintenance of door-to-door infrastructure confers on DPAG an advantage over competitors who are obliged to cover those costs entirely out of their own revenue. (116) See II. (F). (117) The Commission has limited its investigation to door-to-door parcel services open to competition because the complaints by UPS and BIEK focus on these services. (118) This differentiates the present case from the recent decision in Case C 47/98 Poste Italiane, in which the investigation did not reveal the existence of an aggressive rebate strategy in a postal market open to competition. Furthermore, as opposed to the complaint against Poste Italiane, which was lodged by another State-owned postal operator and which limited itself to alleging that Poste Italiane received more State resources than strictly necessary for the discharge of its public interest tasks, the complaints lodged by UPS and BIEK in the present case specifically allege that DPAG received funds from the State which enabled it to hinder the competitive opportunities of private providers of door-to-door parcel services. This has rendered necessary an analysis of the infrastructure costs dedicated to door-to-door services and of whether revenue from these services covered the costs attributable to this infrastructure. In contrast to the present case, Poste Italiane was present neither in the door-to-door parcels sector nor in any other postal markets open to competition, nor were there any competitors that alleged that their competitive opportunities were hindered by a particular pricing policy pursued by Poste Italiane. When confronted with specific complaints alleging the hindering of the competitive opportunities of other undertakings, the Commission must therefore assess: (1) whether these strategies aimed at hindering competition were financed by State resources; and (2) whether such hindrance can exceptionally be inseparably linked to the discharge of public service obligations. (119) German authorities' letter of 16 September 1999, p. 10 and Annex 1 p. 5. (120) This renders the principle of tariff uniformity inapplicable to the designated customer groups. (121) Entwurf einer Verordnung zur Regelung der Pflichtleistungen der Deutschen Bundespost Postdienst, Stand 9.12.1992, German authorities' letter of 27 March 2000, Annex to question 3. (122) Annex 3 to the German authorities' letter of 27 March 2000. (123) Allgemeine Geschäftsbedingungen Frachtdienst Inland, point 3.3.2 Pauschalentgelt für selbstgebuchte Paketsendungen, submitted at Annex 1 to the German authorities' letter of 18 March 1997. (124) Allgemeine Geschäftsbedingungen Frachtdienst Inland, point 3.3.4 Zusammenarbeit mit Versendern (Kooperation), submitted at Annex 1 to the German authorities' letter of 18 March 1997. (125) The procedure of cooperation in respect of heavy Infopost is described in the new point 3.3.4.2 of the General Terms of Business for Inland Freight Services, which was announced in August 1995 by measure (Verfügung) P 777/1993: "Senders of large volumes of heavy Infopost may in respect of such consignments by contract agree to take over from the postal service certain sorting functions going beyond the requirements of section 4.2, or the loading of dedicated transport units, or both. In return, the postal service will reduce the basic charge for heavy Infopost". (126) As mentioned above, the provision granting DPAG, for the first time in its history, the freedom to grant rebates is Article 2(2)(3) of the Postdienst Mandatory Services Ordinance. According to this provision, DPAG may grant rebates to certain customers who pre-sort and ship certain minimum quantities; see German authorities' letter of 16 September 1999, p. 10. In these circumstances, the uniform tariff functions as a maximum tariff, see explanatory memorandum to Article 6 of the Postal Universal Service Ordinance (Postuniversaldienstverordnung) of 30 September 1999, p. 11. (127) The prices for parcels and all consignments comprising at least 50 items per operation are determined by the market price corresponding to the criteria of Article 20(2) of the Postal Act; see explanatory memorandum to Article 6 of the Postal Universal Service Ordinance of 30 September 1999, p. 11. (128) As stated above, business customers benefited from special agreements authorised under Article 2(2)(3) of the Postdienst Mandatory Services Ordinance. These "self-labellers" or "cooperation partners" as a rule did not hand in parcels at the postal counter owing to the volumes involved, but had the technical means to pre-sort and code parcels and stack them on pallets before loading them onto vehicles provided by DPAG. In order to take part in the self-labelling procedure, a customer had to ship at least 10000 items a year. The stringent requirements as regards sorting, coding and loading capacity and the annual minimum quantities shipped show that these services are for business customers. It is precisely the serving of these business customers that has been opened up to competition since the 1970s. (129) German authorities' letter of 16 September 1999, Annex 91/3, p. 3. (130) According to Annex 91/3, p. 17, in the door-to-door segment business customers require services to have the following features: (1) 24-hour delivery time; (2) collection at the customer's premises; (3) computerised tracking and tracing; and (4) specific door-to-door price. (131) DPAG acknowledges that its competitors are able to deliver approximately 56 % of all items within 24 hours. This covers a large proportion of consignments in Germany. The former Bundespost, however, was capable of delivering only [...] % of items within 24 hours. This success rate was, moreover, limited essentially to local services; see Annex 91/3, p. 15. (132) Annex 91/3, pp. 3 and 13. (133) Annex 91/3, p. 17. (134) Annex 91/3, p. 5. (135) Annex 91/3, pp. 3 and 13. (136) To verify whether DPAG achieves revenue in door-to-door parcel services that exceeds the additional costs attributable to the provision of these services, consideration must be given to the appropriate time frame over which the costs and revenue situation should be analysed. In the present case, a very short period would not allow any meaningful conclusions to be drawn about medium-term trends in the coverage of the additional costs associated with door-to-door parcel services. A more representative period of 1994 to 1999 has therefore been chosen. This assessment of the costs and revenue situation over a medium-term period also reflects the approach taken by Article 37(3) of the Postal Organisation Act, according to which a long-term undercoverage of costs is likely to adversely affect the competitive opportunities of other undertakings. (137) German authorities' letter of 25 April 2002. (138) See, in particular, J. Gregory Sidak and Daniel F. Spulber, Protecting competition from the postal monopoly (AEI Press, 1996), p. 107. (139) This is confirmed by the conclusions reached by the German Federal Cartel Office in two reports submitted under Article 37(3) of the Postal Organisation Act and Article 7 of the Act concerning the Regulation of Telecommunications and Posts; see Federal Cartel Office, 11 January 1995 and 28 August 1996, submitted by the German authorities by letter of 18 March 1997. (140) Article 12, first indent (OJ L 15, 21.1.1998, p. 14). Under German law, the uniform tariff in the parcel services sector is identical to the affordable price; see Article 1(1) of the Postdienst Mandatory Services Ordinance. (141) Article 12, second indent. (142) 1994: DEM [...]; 1995: DEM [...]; 1996: DEM [...]; 1997: DEM [...]; 1998: DEM [...]. These average unit revenue figures were compiled on the basis of the German authorities' letter of 31 January 2002, Annex to question 5. (143) 1994: DEM [...]; 1995: DEM [...]; 1996: DEM [...]; 1997: DEM [...]; 1998: DEM [...]. These average unit revenue figures were compiled on the basis of the German authorities' letter of 31 January 2002, Annex to question 5. (144) It should be noted that a substantial proportion of the parcels conveyed from door to door for business customers exceed the 2 kg threshold. (145) The revenue per unit achieved in B-to-B parcel services was below the unit cost of providing a door-to-door infrastructure only in 1995, while revenue per unit in mail-order parcel services was consistently below this threshold. (146) Case C-482/99 France v Commission, judgment of 16 May 2002, not yet reported, paragraph 38. (147) Case C-482/99 France v Commission, judgment of 16 May 2002, not yet reported, paragraph 38. See also the judgment in Case C-83/98 P France v Ladbroke Racing and Commission [2000] ECR I-3271, paragraph 50. (148) Case C-482/99 France v Commission, judgment of 16 May 2002, not yet reported, paragraph 24. (149) German authorities' letter of 16 September 1999, Annex 91/3, p. 3. (150) Annex 91/3, p. 11. (151) Parcels branch of Deutsche Post AG, Darstellung und Bewertung der Entscheidungssituation der Sparte Frachtpost 1996, Ctcon, April 1997, Annex 1: FiT-Team; Turnover: Marktanteilsentwicklung im Business-to-Business Segment. These market share data do not include business customer parcels handed in at the postal counter. These are estimated to account for around [...] % of DPAG's overall business-to-business volume. (152) See Commission Decision of 20 March 2001, Deutsche Post AG, OJ L 125, 5 May 2001, p. 27, at paragraph 31. (153) Federal Association of German Mail-order Companies' information brochure Versandhandel in Deutschland, according to which DPAG carries 92 % of mail-order parcels in Germany, p. 17. (154) See conclusions by the German Federal Cartel Office in two reports on the monitoring of competition submitted under Article 37(4) of the Postal Organisation Act, Federal Cartel Office, 11 January 1995, p. 7 and 28 August 1996, p. 6, submitted by the German authorities by letter of 18 March 1997. (155) Case 730/79 Philip Morris v Commission [1980] ECR 2671, paragraph 11. (156) OJ C 74, 10.3.1998, p.9. (157) Case 53/00, paragraph 32.