Letter monopoly

The Letter Monopoly (German: Briefmonopol) was a condition created after the German law was changed in 2005—2007 to allow an exclusive license to the German post office, Deutsche Post, for the transport of letters and catalog deliveries of up to 50 grams from the previous 100 grams. This limit only applied to a portion of the postal market in a service industry of some 1,000 providers, but it created a monopoly. The "Letter Monopoly" was often justified by the provision of universal service by the state, but some German cities wanted it to be abolished.

Since 1998, the German Federal Network Agency for Electricity, Gas, Telecommunications, Postal Service and Railways (Bundesnetzagentur, BNetzA) has licensed the professional transport of letters and mail, to which there was no weight restrictions. However, the relevant service providers were obliged to provide the so-called "higher-valued services" such as "same-day express delivery" or collection from the sender by the post office by 31 December 2007. Thus, additional costs that make it usually impossible for the licensees resulted in 'professional transport of letters' to set more favorably than the German post office AG in the "normal delivery" in comparison to the usual letter dispatch. With the cessation of the postal monopoly on 1 January 2008, the requirement to provide "higher-valued services" also fell away for the post office competitors.

Problems for competitors under the new arrangements include Deutsche Post being exempt from the value added tax, while its competitors are not. Furthermore, the post office did not have to pay accident insurance for its employees. Possible competitors lodged complaints with the German Federal Constitutional Court and/or the Federal Finance Court. The Hermes logistics group requested abolition of the value added tax obligation on 12 December 2007 with the Federal Department of Finance starting from 1 January 2008. The decision of the Ministry is still pending.

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Wikipedia