DHL 2004 Annual Report Download - page 75

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Legal risks from pending cases
Legal risks arise from the cases pending before the administrative courts against the
RegTP’s ruling concerning the conditions for the price-cap procedure in July 2002 as
well as against the RegTP’s price approvals under the price-cap procedure for 2003,
2004 and 2005.
In the European Commission competition proceedings, which were initiated on the
basis of accusations about excessive mail prices made by the Deutscher Verband für Post
und Telekommunikation (German Association for Posts and Telecommunications), we have
presented the European Commission with detailed evidence to support our argument
that the prices are reasonable.
Conditions determined by the regulator oblige us to allow customers and competitors
downstream access to our network. Depending on the outcome of ongoing proceedings
against the final decisions by the RegTP in the administrative courts, the Bundeskartell-
amt (German Federal Antitrust Authority), the European Court of Justice and the Euro-
pean Commission, we could be faced with a substantial decline in revenue and earnings.
We would like to highlight the following cases:
In a ruling on October 20, 2004, against the Federal Republic of Germany, the
European Commission found that the relevant provisions of the Postgesetz (German
Postal Act) are not consistent with EU law. This ruling related to downstream access to
Deutsche Post’s network by mail consolidators. The Federal Republic of Germany was
required to inform the European Commission within two months of the measures it
has taken to satisfy EU law. It appealed against the European Commission’s ruling in
December of the year under review.
By way of a ruling dated February 11, 2005, in corresponding proceedings, the
Bundeskartellamt prohibited Deutsche Post AG from refusing downstream access by mail
consolidators to its network.
In addition, several competitors have asked the RegTP to require them to be granted
access as mail consolidators.
In our view, the Postgesetz and the scope of the exclusive license comply with
Community and competition law, notably with the EU Postal Services Directive and the
competition rules of the EC Treaty. For this reason, we filed an appeal against the Euro-
pean Commission’s ruling on December 22, 2004. An appeal against European Com-
mission decisions does, as a rule, not have a suspensive effect. We appealed against the
Bundeskartellamt’s decision and will apply for suspensive effect.
If the rulings by the European Commission, the Bundeskartellamt or the RegTP
result in an obligation to grant mail consolidators downstream access to our network,
this could lead to revenue losses in no more than the low hundreds of millions per year.
An allegation by the Monopolkommission (German Monopoly Commission) is the
subject of a request for information by the European Commission in response to a com-
plaint by a third party to the German federal government on October 11, 2004. The
allegation is that Deutsche Post AG contravenes the prohibition on state aid enshrined in
the EU Treaty by allowing Deutsche Postbank AG to use Deutsche Post outlets at below
market rates. Deutsche Post AG continues to maintain that the allegation is inaccurate,
and that the fee paid by Deutsche Postbank AG complies with the provisions on competi-
tion and state aid laid down in European law.
Safeguarding the Future
71
Group Management ReportGroup Management ReportConsolidated Financial StatementsAdditional Information