European court awards Deutsche Post World Net €1bn repayment
Deutsche Post World Net will receive a repayment of around €1 billion after the European Court of the First Instance in Luxembourg overturned a 2002 decision by the European Commission that ordered DPWN to repay €907 million in purported state aid and interest.
At the time, the European Commission determined that between 1994 and 1998 Deutsche Post had covered a cost deficit in the competitive business parcel segment through improper cross-subsidisation with State aid funds earmarked for the financing of the universal service.
Deutsche Post has always disputed this claim, and appealed the Commission's decision.
No cross-subsidisation was found in the Commission antitrust proceedings, and in September 2002 Deutsche Post brought an action for annulment of the Commission's state-aid decision before the European Court of the First Instance.
However, as a result of the Commission's decision, Deutsche Post had to repay €572 million that was determined to be state aid plus €335 million in interest to the Federal Republic of Germany at the beginning of 2003.
Germany will now repay this amount with interest. Deutsche Post expects to receive the payment in several weeks' time, and the company said it would prefer to earmark the amount for returning to shareholders, pending clarity regarding other cash-relevant issues.
At the time, the European Commission determined that between 1994 and 1998 Deutsche Post had covered a cost deficit in the competitive business parcel segment through improper cross-subsidisation with State aid funds earmarked for the financing of the universal service.
Deutsche Post has always disputed this claim, and appealed the Commission's decision.
No cross-subsidisation was found in the Commission antitrust proceedings, and in September 2002 Deutsche Post brought an action for annulment of the Commission's state-aid decision before the European Court of the First Instance.
However, as a result of the Commission's decision, Deutsche Post had to repay €572 million that was determined to be state aid plus €335 million in interest to the Federal Republic of Germany at the beginning of 2003.
Germany will now repay this amount with interest. Deutsche Post expects to receive the payment in several weeks' time, and the company said it would prefer to earmark the amount for returning to shareholders, pending clarity regarding other cash-relevant issues.