Deutsche Post Protests Ruling

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Deutsche Post, Germany's post office, protested a demand yesterday by the German government that it pay back a total of 906 million euros ($916 million) in state aid under a European Union ruling.

In June, the EU's Executive Commission ordered that Deutsche Post, Germany's main mail company in which the government still holds a majority stake, repay 572 million euros ($578 million) plus interest, saying the firm used profits from its legal monopoly on mail delivery to offer door-to-door parcel delivery services at below cost during the 1990s.

The commission, which is the EU's executive arm, charged that from 1994 to 1998 Deutsche Post offered door-to-door package delivery services to businesses at "dumping prices," undercutting private competitors and racking up "substantial losses."

After a three-year probe, regulators concluded that Deutsche Post was covering the deficit with revenue from areas where it still has a monopoly, such as letter deliveries, or other state resources. The probe was sparked by complaints from competitors, including United Parcel Service.

The Bonn-based company, which already appealed the commission's decision, took a charge of 850 million euros ($858 million) to cover that payment in the first half of this year. The charge was calculated by the Federal Ministry of Finance. Deutsche Post said in a statement it would appeal the payment demand from the Finance Ministry because the "interest calculation is wrong."

The company has a majority stake in DHL Worldwide Express delivery service and has acquired dozens of other delivery companies. The government sold 29 percent of Deutsche Post in 2000 but has put off selling a majority stake.


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