Competition Authority completes assessment of competition in the postal sector

The approaching deadline for the completion of liberalisation in the postal sector, planned for 31 December 2010, has led the Competition Authority (CA) to draw up an assessment of competition in the sector and issue a set of important and timely recommendations, in accordance with its powers of supervision.

The results of this analysis have been turned into a guidance document entitled Liberalisation of the Postal Sectorthe main competition issues, which the CA is now releasing, six months before the full opening up of the postal market.

The liberalisation of the market may raise questions regarding competition, as in the case of other network industries. This guidance document identifies the most common types of anti-competitive behaviour and deals with the European Commission’s practice in delivering rulings in this respect, as well as that of the various EU Member-States’ competition authorities.

The document describes the sector and the market in Portugal, identifies the restrictions on competition that other postal service providers than the incumbent may face, and presents its conclusions and recommendations, with the aim of promoting competition and consumer well-being.

As a result of the slower liberalisation process in Portugal, the legal constraints on entry and expansion also play an important role in this sector. They are related, in particular, to the existence of a reserved area, the licensing processes, the network access issues, the difference in treatment on taxation, the universal service requirements and the regulatory uncertainty.

To encourage new operators to enter the postal sector, the CA considers that a regulatory framework is indispensable. It must inspire a sense of certainty among providers regarding the rules by which they will be operating.

Accordingly, the CA recommends that: 

  • Whenever possible, the postal service should operate on the basis of market mechanisms, with the inclusion of an open tendering procedure, in the regions where this is viable; 
  • The selection process for the universal service provider should be transparent and designed in such a way as to include the greatest number of applicants who are qualified to provide this service; 
  • Access to the elements of the postal infrastructure network, for all the providers competing with the incumbent, should be guaranteed on a transparent and non-discriminatory basis, as set forth in the third Postal Directive and the Portuguese legislation; the same is recommended in the case of network interoperability; 
  • A level playing field should be secured by means of a revision of the tax rules that guarantees the application of VAT without distortions in the market.
The CA consulted the National Communications Authority (ICP-ANACOM) and took the sectoral regulator’s comments into account.
(Nº: 8/2010)