Discussion Papers

Antonia Niederprüm

Quersubventionierung und Wettbewerb im Postmarkt
Nr. 225 / Juli 2001

Summary

A fundamental requirement for an anti-competitive cross-subsidization is the fact that an operator is active on markets with different degrees of competition. If operators on a monopolized market are able to gain profits which are above the stand alone costs of services or products, the operators have the possibility to finance loss-making services on markets open to competition. If – on top of this - these products are offered with the aim to drive competitors out of the market or to prevent potential competitors from entering the market, the operator is applying a predatory pricing-strategie financed by cross-subsidization.

The possibility to proof cross-subsidization exists within the bounds of the so called 'incremental cost-test'. According to that a multi-product operator earning zero profits is free of cross-subsidisation as far as he is fulfilling the requirements that each product has to bear its incremental costs and that the returns of each product do not exceed its stand alone-costs. For the statement of costs of an operator normally is not lined out to calculate the incremental costs of a service, it is the question which kind of statement of costs is suitable for the appropriate determination of incremental costs. In this case the statement of activity based costing, ABC is particular suitable; it is a modern way of to fully distributed costs, which follows the principle of cost causation.

The European Directive combined with the notice on the application of competition rules to the postal sector provides the necessary requirements for an effective control of anti-competitive cross-subsidization by laying down an activity based costing method. In Germany legal feasibilities for relevant rules do exist, for example the necessity of accounting separation, which has to be done concerning the determination of incremental costs.

In the United States of America the Postal Rate Commission is basing its rate case decisions on cost data derived out of activity based costing. Actually, the Postal Rate Commission is determining the incremental costs of each service, which include the variable costs as well as the capacity costs of each service.

In contrast the European Commission in the bounds of its decision on antitrust investigation into Deutsche Post AG relinquishes a similiar way of calculation of incremental costs.

Only German language version available.

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