Brussels, 30/01/2013 (Agence Europe) -On 30 January 2013, the European Commission blocked the planned buy-up of Dutch courier company TNT Express by its US competitor UPS because its investigaiton found that the takeover would have restricted competition by reducing from four to three (or even two - DHL and UPS) significant players in some countries and would lead to price increases for parcel delivery in 29 countries, seriously restricting competition in 15 member states. The various proposed remedies put forward by UPS failed to allay the Commission's concerns.
Setting out the case at a press conference, EU Competition Commissioner Joaquin Almunia said that the four big operators -UPS, DHL, TNT and FedEx - are “integrators” that control international integrated air and ground small package delivery networks with IT systems, local sorting centres and transport networks capable of providing international next-day deliveries and competing with each other within the European Economic Area (EEA). A UPS/TNT merger would reduce them to three (UPS, DHL and FedEx) or even two in some countries because FedEx has low market shares in a number of countries where it does not exercise a significant competitive constraint on UPS and TNT, because of the lack of density and scale of its European network. Other market players, such as national postal operators, can only compete to a limited extent because they do not reach comparable efficiency or reliability, given their heavy reliance on road rather than air transport. This would have led to price increases in 29 countries without any substantial benefits in terms of increased reliability or speed. The deal would also have raised serious competition issues in all the new EU member states in Central and Eastern Europe, along with Denmark, Finland, Sweden, Malta and the Netherlands. During the investigation, UPS offered to divest TNT's subsidiaries in 15 countries, but the Commission argued that none of its competitors (not even the French Post Office) had the size needed to compete effectively against DHL and UPS. Moreover, UPS should have signed a binding agreement with a suitable purchaser before the merger was implemented, yet it tried to sign the deal with UPS before the end of the Commission's investigation - “far too late”, said the commissioner. The ban on the UPS/TNT merger is the third of such a huge scale in more than 800 cases given the go-ahead since 2010. (FG/transl.fl)