"Romanian Post Office" gets a fine of 24.1 million Euros in the mail from the Competition Office

• The Romanian Post Office gets the largest individual fine levied on a company by the Competition Council

• The charge: abuse of its dominant position in the postal services market due to it being a state-owned monopoly

The Competition Council (CC) yesterday fined the state owned monopoly "Poşta Română" (ed. note: Romanian Post Office) with 24.1 million Euros (7.2% of its turnover for 2009) for abuse of its dominant position, at the end of an investigation which began in 2005, concerning a possible violation of competition rules, market sources close to the investigation say.

24.1 million Euros is the largest individual fine levied by the Competition Office so far against a company. The maximum allowed amount for the fine in this case was 10% of the company"s turnover - around 32 million Euros.

Our sources stressed that the Competition Council completed the investigation due to pressure from the Court.

The company that lodged the complaint with the Competition Council against the Romanian Post Office, "Mailers", sued the Competition Council demanding that it be required to complete the investigation, and the Court has decided to force the Competition Authority to conclude the investigation by the end of the current year.

The decision to fine the Romanian Post Office was made by five of the seven members of the board of the Competition Council.

According to our information, one of the members of the board did not attend the meeting, and another one, Mircea Valentin, abstained, due to a potential conflict of interest.

Mircea Valentin was a member of the Board of Directors of the Post Office between January and May 2009, according to his CV posted on the website of the Competition Council.

The board of the Competition Council had also met last week, to debate the case of the Romanian Post Office, but did not make a decision at the time due to "technical" issues, our sources claim.

One of the people that served as an advisor to the Romanian Post Office during the last year of the investigation was Gheorghe Oprescu, none other than the former chairman of the Competition Council from September 2007 to May 2009.

According to a press release of the institution, the investigation of the Competition Council was reviewing two possible violations of the law concerning the abuse of dominant position by the Post Office, through its discount policy for providing mail services.

According to the quoted source, this meant that the Post Office awarded preferential discount rates to the company "Infopress Group" S.A. and the application of fee discounts in a discriminatory manner to certain beneficiaries for providing standard commercial mail services and "Infadres" services (sending domestic promotional mail).

According to the press release, the notion of intermediaries includes companies that produce flyers and other mailing materials, as well those involved in mail handling and sorting, according to the press release.

The Romanian Post Office announced it would issue an official statement on the fine after receiving the decision of the Competition Council.

The sanction of the Competition Council can be challenged in court. The Romanian Post Office ended the year 2009 with a net turnover of 1.34 billion lei (approximately 335 million Euros), according to the balance sheet filed with the Ministry of Public Finance.

At the end of 2009, the company had total revenues of 1,500,147,433 lei and total expenses of 1,681,670,549 lei.

Despite being a state owned-monopoly on the postal services market, the Romanian Post Office recorded a loss of 181,523,116 lei and had accrued 526,966,208 lei in debts.