Commission fails in bid to get postal firm to repay €572 million in state aid to the German government.
The European Court of Justice (ECJ) today ruled that Deutsche Post, Germany’s national postal operator, does not have to repay €572 million in state aid to the German government.
The ECJ rejected an appeal brought by the European Commission against a decision by the General Court in July 2008 annulling a Commission decision that the money was illegal state aid and should be repaid.
A spokesperson for Deutsche Post said that the company “welcomes and appreciates this decision by the ECJ”.
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“It is clearly an approval and a confirmation of our legal position,” he said.
The Commission ordered Deutsche Post to repay the money in June 2002, arguing that the German government had overcompensated the postal firm for losses incurred between 1990 and 1995 in meeting its obligations to deliver mail throughout Germany. The Commission claimed that Deutsche Post used the state aid to undercut rival firms in the market for parcel deliveries.
The Commission has no right to appeal today’s decision from the ECJ.
Commission officials investigated the aid to Deutsche Post in response to complaints from rival firms United Parcel Service and Bundesverband Internationaler Express- und Kurierdienste that Deutsche Post was carrying out parcel deliveries at below cost price.
The General Court, however, ruled that the Commission had used a flawed method to calculate whether Deutsche Post was overcompensated, and had failed to examine all the evidence. The Commission, in its appeal to the ECJ, said that the General Court’s conclusions were flawed and that the court had overreached its powers by using its own method to calculate how much compensation Deutsche Post was entitled to.
The ECJ, however, upheld all of the General Courts’ conclusions, rejecting the Commission’s arguments.
A Commission spokesman said the Commission would study the court’s judgement carefully. The spokesman said the court’s judgement was in line with the Commission’s approach during an investigation launched in 2007 into whether compensation received by Deutsche Post from the German government led to any distortions of competition.