The European Commission has found the compensation granted by Italy to Poste Italiane to fulfil its public service mission (so-called 'universal service obligation' or USO) during the 2020-2024 period to be in line with EU State aid rules.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: 'Ensuring access to postal services is essential for all European citizens and businesses. Today's decision enables Poste Italiane to continue delivering basic postal services across the Italian territory at affordable prices, without unduly distorting competition.'

In October 2020, Italy notified the Commission of its plan to compensate Poste Italiane with EUR1.3 billion for carrying out its universal postal service obligation during the 2020-2024 period, with a maximum yearly compensation of EUR262 million. This includes the provision of basic postal services throughout the country at affordable prices and at certain minimum quality requirements.

The Commission examined the measure under EU State aid rules on public service compensation. According to these rules, Member States can grant State aid to companies to compensate them for the extra cost of providing a public service mission, subject to certain criteria. In particular, this requires that companies entrusted with such services are not overcompensated. Avoidance of overcompensation minimises the risk of distortions of competition and guarantees an efficient use of public resources.

In order to comply with EU State aid rules, Italy presented relevant information to calculate the net avoided cost of the universal postal service. In addition, Italy carried out a customer survey on the impact of the discontinuation of Poste Italiane's postal activities (including the USO) in an alternative scenario where Poste Italiane would not receive the aid (the so-called 'counterfactual scenario'). The information provided by Italy has allowed the Commission to exclude any risk of overcompensation.

On this basis, the Commission concluded that the measure is in line with EU State aid rules.

Background

Poste Italiane is the main postal operator in Italy and has been entrusted with the universal postal service obligation for the entire national territory of Italy since 1999.

In 2019 it had 125,894 full time equivalent employees, 12,809 post offices and a turnover of EUR9,403 million. In addition to providing core postal services, Poste Italiane offers integrated products, as well as communication, logistic and financial services all over Italy. Poste Italiane was partly privatised in 2015: on 27 October 2015, 38.2% of Poste Italiane's shares started trading on the Milan stock exchange, with the State retaining the remainder (i.e. 61.8%).

The European Commission had previously found the State financing granted by Italy to Poste Italiane to fulfil its public service mission for the periods 2012-2015 and 2016-2019 to be in line with EU state aid rules.

The Italian postal service market has been fully liberalised since 2011 in accordance with the Postal Directive, and while Poste Italiane emanates from the public administration, it now operates in full competition with other relevant postal service providers. In essence, the USO concerns the delivery of letters and parcels (up to a certain weight), across the whole territory of Italy, at least 5 days per week, at affordable prices.

In July 2019, the Commission approved under EU State aid rules a EUR171.74 million public service compensation granted by Italy to Poste Italiane for distributing, at reduced tariffs, newspapers and publications of book publishers and non-profit organisations in the period 2017-2019.

For More Information

The non-confidential version of the decision will be made available under the case number SA.55270 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved.

(C) 2020 Electronic News Publishing, source ENP Newswire