Discussion Papers

Sonja Schölermann

Customer protection and operator obligations in a liberalized letter market

No. 319 / March 2009


In German postal legislation, customer protection measures are primarily set out in the postal services ordinance of 2001 (‘Postdienstleistungsverordnung’, PDLV). In the past, postal ser-vices were provided by a public monopoly, and adequate consideration of customer interest was not ensured by competition. In these times, the role of customer protection in the postal sector was unambiguous. The objective of this discussion paper is to discuss whether cur-rent German legislation on customer protection is up to date, after the mail market was fully liberalized in January 2008.

First, this paper discusses potential risks for customers and users of postal services in a lib-eralized market. Such risks could result from imperfect competition in the market, or in cer-tain market segments, and may justify regulatory measures to protect customer interests. For example, the needs of recipients may not be met adequately by postal operators since they have no direct contractual agreements with recipients. Second, the study analyses possible risks for customers that relate to the co-operation of several postal operators in the market, e.g. as regards re-direction services.

This paper discusses possible risks for customers, and regulatory remedies to these risks in six areas: 1) complaints procedures, 2) undeliverable mail, 3) misdelivered mail, 4) re-direction services, 5) temporary storage of mail (e.g. during recipients’ vacations) and 6) "poste restante". For each area, customer interests and possible problems are analysed in a first step. In a second step, the paper evaluates regulatory measures to take care of these problems, taking account of customer interests, cost effects on postal operators, and interna-tional experience with these measures. As regards a review of the postal service ordinance, the study arrives at the following recommendations:

  • All licensed operators should be required to maintain simple and inexpensive procedures for customer complaints. Market-dominant operators should be required to publish peri-odically statistics on complaints, and how they have been dealt with.
  • It does not appear necessary to require all licensed operators to return all undeliverable mail to senders. For bulk mail, operators should be free to negotiate handling of undeliv-erable mail with their customers. This may include innovative alternatives to returning the mail, e.g. electronic information about unsuccessful delivery.
  • Licensed operators should be required to place operator labels on all mail they carry (e.g. postmarks with the firm’s name). They should further be required to exchange mail mis-placed mail (e.g. mail returned by a recipient to a different operator than the one that had delivered the item) among each other.
  • Change-of-address databases should be administered by a joint venture of all licensed operators.
  • The present obligation on dominant operators to store mail for absent recipients appears unnecessary.
  • The present obligation on dominant operators to provide "poste restante" delivery ap-pears unnecessary

[Full version only available in German language]

Discussion Paper is available for download.

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