NMa: no indications of TNT abusing a dominant position

The Netherlands Competition Authority (NMa) has found no indications that Dutch mail company TNT is abusing its dominant position on the Dutch mail market through predatory pricing (which is delivering mail against prices below actual costs) in order to thwart competition. The NMa has come to this conclusion after having carried out a thorough investigation, which was the result of a complaint it had received.

The complainant claimed that TNT, by way of its subsidiary Netwerk VSP Geadresseerd B.V., offered mail services against predatory prices as Netwerk VSP delivered part of its mail using TNT's network. Marginal costs for this delivery would be very low in that case, since the TNT postmen would be making their rounds already anyway, and they are not paid extra for delivering additional parcels. Under the Dutch Competition Act, this kind of (partial) outsourcing of mail delivery services by Netwerk VSP to TNT is only prohibited if predatory prices had been involved. However, it turned out that this has not been the case. Still, the fact that TNT, unlike other mail companies, has the opportunity to deliver its mail at very low costs might result in an unequal level playing field on the Dutch mail market. The NMa has informed Dutch State Secretary of Economic Affairs Frans Heemskerk of this in a letter.

The complaint addresses four possible violations of the Dutch Competition Act by TNT: predatory pricing, tying and bundling, exclusive long-term contracts, and price discrimination. The NMa has spent most of its attention on investigating the alleged predatory pricing, for which it gathered data covering 2007 through mid-2009. Having analyzed these data, the NMa did not find any indications of predatory pricing. Additionally, the NMa believes that current market developments do not seem to indicate that competitors are being excluded from the market. Low prices do not always imply predatory prices, but are often just manifestations of healthy competition, which benefits the consumer.

Furthermore, the NMa has not found any indications of tying and bundling, nor has it found any exclusivity provisions (provisions in a contract prohibiting customers from buying services from competitors) between TNT and its customers either. In addition, the NMa considered the durations of the contracts to be reasonable. Finally, the NMa has established that TNT did not engage in selective price-cutting.