In 1994, United Parcel Service (‘UPS’) filed a complaint concerning the granting of unlawful State aid to Deutsche Bundespost POSTDIENST (‘POSTDIENST’).

The Commission opened the formal investigation procedure on 23 October 1999 (‘the Opening Decision’) with regard to various State measures: compensations granted for the universal service obligation, a State guarantee and pension subsidies for the period from 1995 to 1999.

Germany submitted comments on 16 September 1999.

Following publication, the Commission received comments from 14 interested parties, which were duly transmitted to the German Government by letter dated 15 December 1999 providing it with an opportunity to make its own observations concerning these comments.

The German authorities responded by letter dated 1 February 2000, which was registered as received on 2 February 2000.

The Commission considered that the resulting losses of EUR 572 million were ultimately financed, in contravention of Articles 106 and 107 of the Treaty on the Functioning of the European Union (TFEU), by State resources which were granted to Deutsche Post in various forms (e.g. public transfers from sister company Deutsche Bundespost TELEKOM (‘TELEKOM’), public guarantees for loans, and public subsidies to finance the civil servants’ pensions).

Following the 2002 Decision, Germany recovered the incompatible State aid of EUR 572 million from DPAG. Deutsche Post challenged the decision in the Union Courts.

On 13 May 2004, UPS lodged a further complaint concerning unlawful State aid granted to Deutsche Post following the 2002 Decision. UPS argues that the 2002 Decision failed to examine all measures listed in the original 1994 complaint, and that Deutsche Post enjoyed significantly higher financial benefits than the incompatible aid of EUR 572 million. In addition, UPS is of the opinion that Deutsche Post used State resources to expand its parcel operations (e.g. for the purchase of other companies) and to sell services at excessively low transfer prices to its subsidiaries Postbank AG (‘POSTBANK’) and Deutsche Post Euro Express GmbH & Co OHG, which have been active respectively in banking services and marketing of business parcels under the brand name ‘DHL’.

The Commission services sent information requests to Germany on 9 November 2004 and 1 April 2005. Germany submitted its answers on 2 December 2004 and 3 June 2005 respectively.

On 16 July 2004, TNT Post AG & Co KG (‘TNT’) filed a complaint also alleging that Deutsche Post sold services at excessively low transfer prices to POSTBANK. It claimed that, whereas POSTBANK only paid variable costs for the provided services, Deutsche Post financed the common fixed costs of the distribution network entirely out of the revenues of its letter monopoly.

The Commission services sent information requests to Germany on 11 November 2004 and 25 April 2005. Germany submitted its answers on 17 December 2004 and 23 June 2005 respectively.

The objective of the 2007 Extension Decision was to include the newly submitted information and to comprehensively address all potential distortions of competition which resulted from the public measures that were granted to Deutsche Post.

The Commission sent an information request to Germany on 17 July 2008 on all public measures under investigation including a questionnaire on revenues and costs of Deutsche Post for the period from 1989 to 2007. On 5 August 2008, Germany asked for an undefined deadline extension because the availability of certain data would have to be checked before a reply could be provided.

On 12 August 2008, the Commission explained why the investigation on the revenues and costs of Deutsche Post should be effected within the period from 1989 to 2007 and insisted on the submission of the requested information.

On 2 October 2008, Germany presented the results of a further expert opinion to support the position that an accounting analysis after 1994 was not necessary and therefore the appropriate investigation period should be from 1990 to 1994.

On 28 October 2008, Germany submitted information on the public guarantee and the pension measure.

The Commission did not accept Germany’s arguments and insisted that an analysis until 2007 was necessary to fully appreciate the competitive effects of the implemented public measures. Following the two reminders for information of 12 August 2008 and 22 August 2008, the Commission issued an information injunction on 30 October 2008 to enjoin Germany to deliver all necessary accounting information for the whole period from 1989 to 2007.

On 27 November 2008, Germany submitted the requested accounting information for the period from 1989 to 1994. On 5 and 16 December 2008, Germany updated the accounting information which had been submitted on 27 November 2008.

After a meeting between the responsible German Secretary of State, the CEO of DPAG and the Commissioner with responsibility for Competition Policy on 6 February 2009, Germany and Deutsche Post agreed to provide accounting information for the period after 1994.

On 3 March 2009, Germany submitted a first set of accounting information for the whole investigation period from 1989 to 2007

Meetings between Deutsche Post and the Commission services took place on 3 March 2009 in Brussels as well as on 12 March 2009, 2 April 2009, 28 May 2009, 23 June 2009, and 18 September 2009 in Bonn. Germany submitted further information by Deutsche Post on 26 March 2009, 7 May 2009, and 22 June 2009.

Following those meetings and two lists of questions which the Commission services submitted to Deutsche Post on 4 June 2009 and 30 July 2009, Germany provided updated accounting information and further clarifications on 9 July 2009, 31 July 2009, 17 August 2009, 8 September 2009, 10 September 2009 and 15 October 2009.

On 16 and 24 September 2009, the Commission services submitted further questions to which Germany provided the answers on 14 October 2009.

After an initial request for a deadline extension on 23 May 2011, Germany submitted its comments on 29 July 2011.

On 4 October 2011, UPS submitted its comments. They were followed by comments submitted by Free and Fair Post Initiative on 5 October 2011 and comments submitted by Bundesverband Internationaler Express und Kurierdienste (‘BIEK’) on 7 October 2011. On 13 October 2011, the Commission communicated the comments by interested parties to Germany.

On 14 November 2011, Germany submitted its comments on the third parties’ observations.

In that Decision, the Commission concluded with regard to the pension measure that the measure constitutes unlawful and incompatible State aid and ordered recovery of the aid for the period from 1 January 2003 until the comparative advantage has been brought to an end. With regard to the aid for the period from 1995 to 2002, the Commission concluded that it was impossible to quantify the amount of incompatible aid. Consequently, the Commission did not order recovery of the aid with regard to this period.

With regard to the public transfers, the Commission concluded that they were unlawfully granted by Germany in breach of Article 108(3) TFEU, but are compatible with the internal market. With regard to the public guarantee, the Commission concluded that the measure constitutes existing aid to Deutsche Post pursuant to Articles 107(1) and 108(3) TFEU.

Germany subsequently paid back the recovered State aid of EUR 572 million plus accrued interest to Deutsche Post.

Deutsche Post challenged the validity of the 2007 Extension Decision, claiming that the 2002 Decision created legitimate expectations that the Commission would not resume its investigations.

The remainder of the 2012 Decision was not appealed.

1. (a)
   The level of the pension is pre-defined, pursuant to Article 14 of the Law on civil service pensions (Gesetz über die Versorgung der Beamten und Richter in Bund und Ländern (Beamtenversorgungsgesetz – BeamtVG) of 24 August 197619, at a certain percentage of the last salary that the civil servant earns.
2. (b)

   Civil servants are entitled to reimbursement of between 50 % and 70 % of health and long-term care expenses, while they have to assume the remaining expenses themselves. The exact breakdown of health care and long-term care costs depends on several criteria such as the number of children. The civil servants can choose either to insure themselves with a voluntary complementary insurance or to pay their share of the health care and long-term care expenses out of their own pocket.

That provision lays down that, whereas the claim of the civil servant continues to be directed against the State, the State has the right to claim the entire amount from POSTDIENST, TELEKOM and POSTBANK respectively.

With the 1994 reform of postal services and telecommunications (Gesetz zur Neuordnung des Postwesens und der Telekommunikation), civil servants who had worked for POSTDIENST were, pursuant to Article 2(1) PostPersRG, transferred to DPAG. Thereby, the civil servants kept, pursuant to Article 2(3) PostPersRG, their existing legal status. DPAG took over, pursuant to Article 1(1) PostPersRG, all employer’s rights and obligations from the federal State and assumed, pursuant to Article 2(3) PostPersRG, all the civil servants’ claims relating to property rights.

Pursuant to Article 15 PostPersRG, the payment of pension and health expenses to retired civil servants was taken over by a newly created pension fund for Deutsche Post’s civil servants. On 1 July 2001, the pension funds for Deutsche Post, TELEKOM, and POSTBANK were merged into the pension fund for civil servants of the postal service (Postbeamtenversorgungskasse) (‘the Pension Fund’).

Pursuant to Article 16(1) PostPersRG, Deutsche Post had to pay yearly contributions of EUR 2,045 billion to the Pension Fund for the period from 1995 to 1999 which total EUR 10,225 billion.

The remaining deficit (e.g. the difference between the pensions for the retired civil servants and the contribution by Deutsche Post to the Pension Fund), was covered by a pension measure, pursuant to Article 16(2) PostPersRG. The pension measure increased from EUR 151 million in 1995 to EUR 1,118 billion in 1999.

1. (a)

   the level of the pension is not defined in terms of percentage of the last monthly salary but of an average life-time salary;

2. (b)

   expenses for health and long-term care are fully covered.

1. (a)

   the statutory social insurances are financed by joint contributions from the employee and the employer during the employee’s working life (‘compulsory social contributions’);

2. (b)

   the total compulsory social contribution rate is formally divided into an employee’s share and an employer’s share which both cover about half of the total compulsory social contribution rate;

3. (c)

   the employer has the formal obligation to pay the total compulsory social contribution rate to the social insurances funds.

Figure 3 shows that the compulsory social contribution rates have ranged from approximately 39 % to 42 % of the gross wage (gross wage = net wage + employee’s share). Given that the employer’s share and the employee’s share cover about half of the total compulsory social contribution rate, their respective compulsory social contribution rates have been each in the range from approximately 19 % to 21 % of the gross wage.

Deutsche Post’s private employees have not only benefited from the statutory social insurances but also from supplementary pension insurance. Private employees who started before 1997 were offered a supplementary pension insurance cover that would allow them to receive a similar level of pension as civil servants. Thus the supplementary pension insurance covered the difference between the private employees’ statutory social insurance pension, which is equal to a certain percentage of the average life-time salary, and the civil servants’ pension, which is equal to a certain percentage of the last salary. The detailed rules are laid down in the Charter of the supplementary pension agency of the German federal postal service (Satzung der Versorgungsanstalt der Deutschen Bundespost).

On the basis of the Combus judgment, Germany claims that the pension measure did not provide any financial advantage because it relieved Deutsche Post from excess pension costs.

In the 2012 Decision, the Commission rejected Germany’s claims that the existence of an advantage had to be established based on the Combus case law.

In view of the application of the Combus case law in the present case, the Commission will assess whether Germany, by assuming responsibility for the difference between the lump sum fixed between 1995 and 1999 and the total amount of the costs of the pensions of former civil servants of Deutsche Post, conferred an economic advantage on Deutsche Post by comparison with its competitors.

1. (a)

   in a first step, the Commission will establish the level of wage-based social security contributions of other undertakings in the mail/parcel sector;

2. (b)

   then it will establish the level of wage-based social security contributions which Deutsche Post bears for its civil servants;

3. (c)

   finally, the Commission will compare the two levels.