DHL 2006 Annual Report Download - page 75

Risks from pending legal proceedings
Due to our market leadership position, a large number of the services we oer
are subject to sector-specic regulation in accordance with the Postal Act. e
regulatory authority approves or reviews prices in particular, formulates the terms
of downstream access and conducts general checks for market abuse. e resulting
proceedings may lead to a decline in revenue and earnings.
Legal risks arise, for example, from the appeals pending before the administrative
courts against the regulatory authority’s July  ruling concerning the conditions
for the price-cap procedure, from two appeals respectively against price approvals
granted under the price-cap procedure for the years ,  and , as well as
other price approval decisions handed down by the regulatory authority.
European Commission competition proceedings 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).
In these proceedings, we have presented 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. Proceedings are pending before the
administrative or civil courts and the European courts against the relevant rulings
by the regulatory authority, the Bundeskartellamt (German Federal Antitrust
Authority) and the European Commission. We believe that the Postal Act and the
scope of the exclusive license are in compliance with EU and anti-trust regulations,
more specically the EU Postal Directive and the anti-trust rules stipulated by the
Treaty Establishing the European Community. Depending on the outcome of the
proceedings, we could be faced with further losses of revenue and earnings.
An allegation by the Monopolkommission (German Monopoly Commission) is the
subject of requests for information made by the European Commission to the German
federal government in response to a complaint by a third party. e 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. In our opinion, the fee paid by Postbank complies with the provisions
on competition and state aid stipulated in European law.
e European Commission is also asking the Federal Republic of Germany to
comment on the sale of its entire interest in Deutsche Postbank AG to Deutsche
Post AG in . However, the European Commission has already investigated the
acquisition of Postbank as part of the state aid proceedings that were concluded with
the ruling dated June , . At the time, it explicitly concluded that the acquisition
of Postbank involved “no grant of state aid.”
Risk Management 71
Deutsche Post World Net Annual Report 2006
Group Management Report