DHL 2012 Annual Report Download - page 210

 Litigation
A large number of the services rendered by Deutsche Post 
and its subsidiaries are subject to sector-specic regulation by
the Bundes netzagentur (German federal network agency) pursu-
ant to the Postgesetz (German Postal Act). e Bundesnetzagentur
approves or reviews prices, formulates the terms of downstream
access and has special supervisory powers to combat market abuse.
is general regulatory risk could lead to a decline in revenue and
earnings in the event of negative decisions.
Legal risks arise, amongst other things, from appeals by an
association and a competitor against the price approvals under the
price cap procedure for ,  and , and by the asso-
ciation against the price approval under the price cap procedure
for . Although the appeals by the association against price
approvals for the years  to  were nally dismissed by
the Münster Higher Administrative Court, they are now, however,
being continued in the Münster Higher Administrative Court, as
the court of second instance, due to a successful constitutional
complaint.
Legal risks also result from appeals by Deutsche Post 
against other price approvals granted by the regulatory authority.
Deutsche Post  increased its discounts for downstream
access on  July . Deutsche Post competitors and their asso-
ciations led complaints against these discount increases with the
Bundesnetzagentur. ey claim that the increased discounts con-
ict, in particular, with regulatory requirements. However, the
Bundesnetzagentur discontinued its review proceedings by way of a
notication of  September  aer having found no violation
of the applicable regulations. In October , several competitors
of Deutsche Post  brought an action in the Cologne Administra-
tive Court against the Bundesnetzagentur with the aim of reversing
the discount increases. Deutsche Post  considers its charges for
downstream access and the discount increases to be in compliance
with the regulatory and other legal requirements. However, no
assurance can be given that the courts will not come to a dierent
conclusion that would have negative eects on Deutsche Post ’s
revenue and earnings.
In its decision dated  June , the Bundesnetz agentur
concluded that First Mail Düsseldorf GmbH, a subsidiary of
Deutsche Post , and Deutsche Post  had contravened the
discounting and discrimination prohibitions under the Postgesetz.
e companies were instructed to remedy the breaches that had
been identied. Both companies appealed against the ruling to the
Cologne Administrative Court. Furthermore, First Mail Düssel-
dorf GmbH led an application to suspend the execution of the
ruling until a decision was reached in the principal proceedings.
e Cologne Administrative Court and the Münster Higher
Administrative Court both dismissed this application. First Mail
Düsseldorf GmbH discontinued its mail delivery operations at
the end of  and retracted its appeal on  December .
Deutsche Post  continues to pursue its appeal against the Bundes-
netzagentur ruling.
In its ruling of  April , the Bundesnetzagentur deter-
mined that Deutsche Post  had contravened the discrimination
provisions under the Postgesetz by charging dierent fees for the
transport of identical invoices and invoices containing dierent
amounts. Deutsche Post  was requested to discontinue the dis-
crimination determined immediately, but no later than  Decem-
ber . Deutsche Post does not share the legal opinion of the
Bundesnetz agentur and appealed the ruling to the Cologne
Administrative Court.
e European Commission’s state aid ruling of  Janu-
ary  concluded the formal investigation that it had initiated on
 September . e investigation focused on whether the Fed-
eral Republic of Germany, using state resources, overcompensated
Deutsche Post  or its legal predecessor Deutsche Bundespost
 for the cost of providing universal services between
 and  and whether the company was thereby granted state
aid incompatible with  law. According to the decision opening
the investigation, the Commission intended to examine all public
transfers, public guarantees, statutorily granted exclusive rights,
the price regulation of letter services and the public funding of
civil servants’ pensions during the period in question. Also to be
investigated was the cost allocation within Deutsche Post  and
its predecessor between the regulated letter service, the universal
service and competitive services. is also relates to co-operation
agreements between Deutsche Post  and Deutsche Postbank 
as well as between Deutsche Post  and the business parcel ser-
vice marketed by  Vertriebs GmbH. e Monopol kommission
(German Monopoly Commission) had also previously alleged
that Deutsche Post  permits Deutsche Postbank  to use its
retail outlets at below-market rates, and that in so doing it contra-
venes the prohibition on state aid enshrined in the  Treaty. e
Euro pean Commission extended its ocial state aid proceedings
on  May . e extension concerned the funding arrange-
ments for civil servants’ pensions, which were to be examined more
closely, including the pension obligations factored into the price
approval process.
In its state aid ruling of  January , the European
Commission concluded that Deutsche Post  and its predeces-
sor, Deutsche Bundespost , did not receive any exces-
sive state funding for the universal services provided in the years
 to  and that therefore no incompatible state aid was
granted. Equally, the European Commission found no evidence
of illegal state aid with respect to the guarantees issued by the
German state. It also did not nd fault with the co-operation agree-
ments between Deutsche Post  and Deutsche Postbank ,
and between Deutsche Post  and  Vertriebs GmbH. e
European Commission did not revisit the  sale of shares of
Deutsche Postbank  to Deutsche Post  in its ruling. How-
ever, in its review of the funding of civil servants’ pensions, the
European Commission concluded that Deutsche Post  had
received illegal state aid in this area. It said that the pension relief
granted to Deutsche Post  by the Bundesnetzagentur during the
Deutsche Post DHL Annual Report 
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