EU postal legislation

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All EU countries had to transpose the Postal Directive into their national legislation by 31 December 2012. If they failed to transpose it on time or transposed it in incorrectly, the European Commission may initiate infringement proceedings.

The Commission monitors the application of the Directive and is informed by postal operators, consumer groups and citizens whenever the EU rules are not applied or misapplied by national authorities.

Infringement cases

Why create an internal market for the postal sector?

Postal services are one of the so-called network industries (energy, transport and telecommunications) which were opened to competition in the 1990s. Prior to the 1997 Directive, postal services were often fragmented across the EU. Ownership was usually vested in public corporations and while some services within the sector were open to competition (express services) others were not (notably letter mail). At the same time, the sector was operating at a loss while much of its infrastructure required modernisation and fresh investment.

To overcome these shortcomings and to put the sector on a firmer footing, a new approach was needed. Retention of the status quo was not a viable option as it would have perpetuated fragmentation and possibly led to stagnation in the sector. Creating an internal market on the other hand was expected to complement similar initiatives in parallel sectors (network industries), reconcile the interest of postal users and service providers, and pave the way towards a more sustainable, adaptable and innovative postal sector.

What is the economic significance of the postal sector?

In 2011, the EU postal sector accounted for EUR 91 billion or 0.71% of total EU GDP (letter post alone accounted for a total EUR 44 billion or 0.34 percent of GDP with the number of letters being 82 billion). The parcel sector, in terms of volumes, increased to 6.4 billion items in 2011. More generally, postal services provide vital infrastructural support for commercial, governmental and social activities across the EU, and a number of postal universal service providers play an important role in the provision of financial and electronic services.

Is creating an internal market for postal services likely to disrupt and distort the operation of the postal sector?

The internal market for postal services has been gradually established. All major changes have been phased in, in a controlled way, by two amendments of Directive 97/67/EC (Directive 2002/39/EC and Directive 2008/06/EC). Postal operators and users had a period of 14 years to adjust to the full opening of the market, which was accomplished in 2011 in the majority of EU countries (with a further two years allowed for 11 EU countries).

EU policy tries to reconcile the interests of a number of key stakeholders such as national postal operators (i.e. universal service providers), other postal operators (including express operators), new entrants to the postal market, and users/consumers, while also striking the right balance between increasing competition and the sustainable maintenance of the universal service.

Current rules on access to postal services for users, quality of service standards and pricing levels are all designed to ensure that citizens and businesses get value for money, while also providing universal postal service providers with a stable environment and the opportunity to invest in new products and services.

What benefits has the internal market generated for citizens?

Citizens continue to be significant users of postal services and their interests are being protected in a number of ways. For example, Directive 97/67/EC ensures that prices must be affordable so as to ensure maximum access and geared towards costs so as to minimise opportunities for excessive charges and ensure the economic viability of the service. The Postal Services Directive also stipulates that postal operators providing universal postal services must not apply discriminatory tariffs and allows for the provision of uniform tariffs.

With regards to quality, the Postal Services Directive requires EU countries to set standards governing access to postal services and delivery targets. In the event of a failure to deliver on these targets, EU countries may take corrective action including the imposition of fines. The Postal Services Directive also establishes quality standards for cross border mail and stipulates that postal users should have a simple and low cost, yet effective and accountable redress system with which they can resolve their complaints about access or quality of service.

What is the universal (postal) service?

Within the postal sector, the universal service involves the permanent provision of certain basic services for at least five working days a week from a sufficient number of contact points within a national territory that takes into account the needs of users. Within these boundaries, EU countries have flexibility over what exactly constitutes a universal service to fit their domestic circumstances. Elements of the universal service must also meet specified quality targets and be available at affordable prices.

Reform of the postal sector has been underway for some time. What has been achieved since the Postal Directive was adopted in 1997?

The two core aims of European postal policy, namely a minimum range of services of specified quality at affordable prices for all users and market opening with fair conditions of competition, have broadly been achieved and the full opening of the market has been accomplished. However, the pace of competitive entry is slower than originally anticipated and national postal operators have retained their dominant positions in certain markets even after these markets were formally opened to competition.

Have the prices of postal services increased or decreased as a result of EU Postal policy?

Prices for consumer letter mail have generally increased in recent years. However, prices for business users (which generate three quarters of mail volume) have decreased. The main reason for rising stamp prices is e-substitution, which has caused a reduction in the number of letters sent, and consequently an increase in operators' costs.

Prices for consumer letter mail do vary significantly across Europe however. In 2013, the average price of a stamp for a first class 20-gram letter service ranged from EUR 0.26 in Malta to EUR 1.32 in Croatia. In general, consumers are also satisfied with the quality of postal services and find that although prices are rising, they are at a generally acceptable level.

How are postal services facing up to the challenge posed by new forms of communication such as e-mail?

Postal services are continuing to evolve and this evolution is being shaped by changes in closely related sectors including communications, advertising and transport. While it is true that the use of e-mail has increased in recent years and that letter mail is declining as a percentage of overall message volumes, many key sectors such as e-commerce, mail order, publishing, insurance, banking and advertising depend on postal infrastructure. Businesses are increasingly finding mail to be an exceptionally effective medium for forging and strengthening commercial relationships. Nowadays, the bulk of mail deliveries are no longer dominated by private person-to-person communications but by business-to-business and business-to-customer communications. In short, mail continues to be an important communication channel.

What role do national postal regulators play in the implementation of EU postal policy?

National regulators are entrusted with a wide range of regulatory functions that stem from EU and national legislation. These extend from more specific functions such as ensuring compliance with quality standards and price setting to broader and far reaching functions such as creating the conditions for the growth of competition and paving the way for new entrants into the sector.

The concept of a postal regulator is now well established across the EU and most are endowed with the resources and power to monitor and sanction postal operators for non-compliance with their obligations.