Measures to strengthen the competitive conditions in the postal market

This decision is based on a bilateral settlement between the Competition Authority and Íslandspóstur. The settlement comprehensively seeks to resolve permanently the competition problems which have crystallised in the various notices and complaints about the company's activities that have been received by the Competition Authority. Most of the complaints have been directly or indirectly related to competitors' suspicions that profits from Íslandspósts's monopoly activities have been used to cross-subsidise its competitive activities.  

In order to resolve the problems that arose during the investigation of these matters, provisions are, among other things, introduced into the aforementioned settlement concerning the preparation of special accounts for the different competitive activities of Íslandspóstur and establishing clear criteria for assessing possible cross-subsidisation from its private sector activities to its various competitive activities. These criteria are used both by Íslandspóstur itself for internal control and by regulators when assessing potential competition law infringements, and are designed to prevent cross-subsidisation from its monopoly activities to its competitive activities. 

Operational and managerial independence of subsidiaries is stipulated, and it is provided that the company's express postal service, TNT Express, is moved from the parent company into a subsidiary. 

The settlement also introduces detailed conditions regarding Iceland Post's dealings with its subsidiaries, particularly to ensure a level playing field for competitors of Iceland Post's subsidiaries in their dealings with Iceland Post. Furthermore, Iceland Post's authorisations to finance the activities of its subsidiaries are significantly restricted in order to prevent distortion of competition in the markets in which the subsidiaries operate. 

Furthermore, the settlement contains provisions which are intended to ensure clearly that competitors of Íslandspóstur enjoy the same terms and conditions for the distribution of bulk mail in remote areas, and that Íslandspóstur's bulk mail operations are charged for this distribution. Furthermore, it is stipulated that competitors of Íslandspóstur in the field of postal services shall enjoy comparable terms and conditions in their dealings with Íslandspóstur and other customers in the same position, and that unreasonable refusal to do business with competitors in the field is prohibited.in the universal postal service of Íslandspóstur. 

Certain changes are provided for in the internal organisational structure of the parent company. These involve separating the sales aspects of the business from the division of the parent company responsible for cost allocation. This, among other things, ensures that the allocation of the company's costs between its proprietary business on the one hand and its various competitive activities on the other is carried out objectively and does not distort competition. In general, the aforementioned separation of activities contributes to reducing the risk of conflicts of interest. 

Finally, it should be noted that, among other things, provision is made for the establishment of a special supervisory board which monitors the settlement, receives complaints and makes decisions in accordance with its provisions. Two of the three board members shall be independent of Íslandspóstur.