On 3 June 2016, the European Commission concluded that the Belgian public service compensation to bpost is compatible under EU State aid rules.
On 29 June 2015, Belgian authorities had notified to the European Commission public service compensation to be granted to postal services provider bpost for the period 2016–2020 in accordance with the 2012 EU framework applying to compensation for services of general economic interest (“SGEI”). The public service compensation in question is for financing the maintenance of a post office network throughout Belgium, the delivery of pension payments, the provision of universal cash at counter services and the delivery of election-related printed material as well as recognized newspapers and periodicals in Belgium. The total compensation amounts to €1.3 billion for the five-year period.
bpost is the leading postal operator in Belgium. Its main activities are collecting, sorting, transporting and delivering letters and parcels.
Large compensation amounts granted to SGEI operators have to be notified to the European Commission and may be declared compatible if they meet the criteria set out in the 2012 SGEI EU framework.
Under this framework, the Commission verifies that companies involved in public services are not given an unfair competitive advantage by being compensated for more than the costs of providing these services.
The SGEI EU framework therefore imposes rules to minimize distortion of competition and to guarantee efficient use of public resources.
Regarding the public services entrusted to bpost, Belgian authorities had undertaken a public consultation that confirmed the essential role of the postal public services in question.
Another crucial element is the methodology used to determine the compensation, as the compensation must not exceed the costs of the public services provided by bpost.
In this case, the Commission concluded that the compensation had been based on a rigorous methodology. The 2012 SGEI EU framework also imposes efficiency criteria.
Belgian authorities included in the compensation mechanism incentives to encourage bpost to increase the efficiency and quality of its services.
In terms of delivering newspapers and periodicals, bpost was selected for this purpose following an open, transparent and non-discriminatory tender.
Following its assessments, the European Commission concluded on 3 June 2016 that the Belgian public service compensation is compatible under EU State aid rules.
Annabelle Lepièce
Partner, Brussels
annabelle.lepiece@cms-db.com
