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The CC fines State owned Postal Service Provider



On 3 December, the Competition Council (CC) of Latvia fined postal service provider of Latvia – VAS „Latvijas Pasts” – for abusing its dominant position and discriminating competitors of its subsidiary undertaking SIA „Mailmaster”. The fine imposed to VAS „Latvijas Pasts” was set in the amount of EUR 12 000.

Undertakings which on behalf of their clients print and envelope bulk mailing letters, e.g. bills and different notifications, collaborate with VAS „Latvijas Pasts”, which ensures the delivery of mail to addressees. During the investigation, the CC stated that VAS „Latvijas Pasts” has provided its subsidiary undertaking SIA „Mailmaster” with significantly lower charges for the delivery of such mail than competitors, thus, ensuring competitive advantages to SIA „Mailmaster”. 

In a public procurement of preparation and delivering 22 000 property tax notifications of Rēzekne municipality, with the lowest price offered did win SIA „Mailmaster” – the undertaking to which VAS „Latvijas Pasts” ensured about 89% lower charges for services than to the other applicant – SIA „Drukātava”.

VAS „Latvijas Pasts” has a dominant position in the market of bulk mailing letters of traditional postal services within the 3rd delivery service area (i.e. in regions outside big cities) of Latvia. Therefore, the undertaking is able to use its market power abusively against those undertakings, which are in need for mail services within the very area.

VAS „Latvijas Pasts” has the liability to supply with universal postal services. The quality requirements and charges are approved by the Public Utilities Commission (PUC). In addition to the universal service, VAS „Latvijas Pasts” had introduced an alternative postal service to which quality requirements and charges by the PUC do not apply to. Thus, VAS „Latvijas Pasts”, while providing the alternative postal service, charges in each of the case determined individually. However, being a dominant market player, VAS „Latvijas Pasts” must provide its clients with non-discriminatory charges, as well as must ensure that these charges are known and set by criteria that are clear to clients, which in this case had not been accomplished.

The investigation was initiated after an application of AS „Itella Information” (since 2 November, 2013, AS „OpusCapita”). In Latvia there are three undertakings that offer printing and enveloping of bulk mailing – AS „OpusCapita”, SIA „Drukātava” and SIA „Mailmaster”.