DHL 2013 Annual Report Download - page 210

 Litigation
A large number of the postal services rendered by Deutsche
Post  and its subsidiaries are subject to sector-specic regulation
by the Bundes netz agentur (German federal network agency) pur-
suant to the Postgesetz (German Postal Act). As the regulatory
authority, the Bundes netz agentur approves or reviews these prices,
formulates the terms of downstream access and has special super-
visory powers to combat market abuse. is general regulatory
risk could lead to a decline in revenue and earnings in the event of
nega tive decisions.
Legal risks arise, amongst other things, from pending ad-
ministrative court appeals by an association and a competitor
against the price approvals under the price cap procedure for ,
 and , and by the association against the correspond-
ing decisions for  and . Although the appeals against
price approvals for the years  to  were dismissed by the
Münster Higher Administrative Court, as the court of appeal, an
appeal has been led with the Federal Administrative Court. e
Cologne Administrative Court has not yet decided on the appeals
against the price approvals for  and .
Legal risks also result from appeals by Deutsche Post 
against other price approvals granted by the regulatory authority.
ese largely relate to appeals against the price approvals for access
to Deutsche Post ’s post oce box facilities and change of address
information by competitors.
ere are legal risks in connection with the discounts
for downstream access, which Deutsche Post  increased on
 July . Deutsche Post competitors and their associations
led complaints against these discount increases with the Bundes-
netz agentur. ey claim that the increased discounts conict, in
particular, with regulatory requirements. However, the Bundes-
netz agentur 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 against the Bundes netz-
agentur with the aim of reversing the discount increases. Deutsche
Post considers its charges for downstream access and the dis-
count increases to be in compliance with the regulatory and other
legal requirements. Following the hearing at the Cologne Admin-
istrative Court on  November , the claimants withdrew their
appeal. e Bundes netz agentur’s decision of  November 
therefore stands.
In its decision dated  June , the Bundes netz agentur
concluded that First Mail Düsseldorf GmbH, a subsidiary of
Deutsche Post , and Deutsche Post  had contravened the
discounting and discrimination prohibitions under the Post gesetz.
e companies were instructed to remedy the breaches that had
been identied. Both companies appealed against the ruling.
Further more, First Mail Düsseldorf 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 netz agentur ruling.
In its ruling of  April , the Bundes netz agentur 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 . e ruling was implemented on  January . Deutsche
Post does not share the legal opinion of the Bundes netz agentur and
appealed the ruling.
On  January , the European Commission issued a
ruling on the formal investigation regarding state aid that it had
initiated on  September . e Commission determined that
Deutsche Post  was not overcompensated, using state resources,
for the cost of providing universal services between  and .
It also did not nd fault with the guarantees issued by the German
state for legacy liabilities. By contrast, it did nd that some of the
funding arrangements for civil servants’ pensions represented il-
legal state aid. It said that the pension relief granted to Deutsche
Post  by the Bundes netz agentur during the price approval pro-
cess led to Deutsche Post  receiving a benet in relation to its
services that are not rate-regulated. According to the Commission,
this must be claimed back by the German government, which
must also ensure that the granting of state aid does not in future
confer benets with respect to non-rate-regulated services (illegal
state aid). e European Commission has le the calculation of
the precise amount to be repaid to the Federal Republic. However,
in a press release, the European Commission had referred to an
amount of between  million and  billion.
Deutsche Post  and the federal government are of the
opinion that the European Commission’s state aid decision f
 January  cannot withstand legal review and have each sub-
mitted an appeal to the European Court of Justice in Luxembourg.
To implement the state aid ruling, the federal government
called upon Deutsche Post  on  May  to make a pay-
ment of  million including interest. Deutsche Post  paid
this amount to a trustee on  June  and appealed the recov-
ery order to the Administrative Court. However, this appeal has
been suspended pending a ruling from the European Court of
Justice. e company made additional payments of . million
and . million to the trustee on  January  and  Janu-
ary , respectively. All payments made until the reporting date
were reported in the balance sheet under non-current assets; the
earnings position remained unaected.
e European Commission has not expressed its nal accept-
ance of the calculation of the state aid to be repaid. On  Decem-
ber , it initiated proceedings against the Federal Republic of
Germany with the European Court of Justice to eect a higher
repay ment amount. Although Deutsche Post  and the federal
government are of the opinion that the European Commission’s
state aid decision cannot withstand legal review, it cannot be ruled
out that Deutsche Post  will ultimately be required to make a
(potentially higher) payment, which could have an adverse eect
on earnings.
206 Deutsche Post DHL 2013 Annual Report
Notes
Other disclosures
Consolidated Financial Statements