The Commission for the Protection of Competition (hereinafter ‘the CPC’) at its meeting convened on 29 August 2012, having evaluated all the evidence before it, unanimously decided that the Department of Postal Services (hereinafter ‘the DPS’), infringed section 30 (3) of Law No.13(I)/2008 (hereinafter ‘the Law’), as a result of its omission to provide the information requested by the Service of the CPC during the investigation of a complaint submitted by Andreas Alexandrou Accessories Ltd against the DPS, i.e. separate financial statements for DPS’s products and services according to the methodology of the fully distributed pricing, for the year ended 31December, 2009, within the predetermined time period.
The CPC concluded that the above information requested from the DPS, was absolutely necessary in order to conduct a preliminary examination of the alleged infringement, since the alleged period of infringement is the year 2009. More specifically, the requested information was necessary in order to conduct the necessary economic analyses using the methodology of the average variable cost and total cost, based on the audited financial statements for 2009, to indicate whether the retail prices of DPS’ service for Items Without Delivery Address during the said period, resulted from the existence of cross subsidizing with other profitable services.
The CPC did not accept the reasons given by the DPS for not providing the information requested. The CPC pointed out that the data is recorded in the accounting system and that the DPS has a statutory obligation to prepare audited financial statements on an annual basis, something that it omitted to do and for which it has already been fined by the Commissioner of Electronic Communications and Postal Regulation. The CPC unanimously decided to impose an administrative fine of €10,000 (ten thousand Euros) on the DPS for infringement of Section 30 (3) of the Law.
The CPC further decided to order the DPS to submit separate accounts for its products and services, based on the methodology of fully distributed pricing, for the year ended December 31, 2009, and / or account statements for its service for Items Without Delivery Address for the year ended 31 December 2009, using the methodology of the Average Avoidable Cost (AAC) and the Average Total Cost (ATC), as well as the economic data used and the calculations performed for the preparation of these statements, accompanied by a certificate from authorized external accountants / auditors verifying their truthfulness, by 31/1/2013 the latest.
The CPC pointed out that, should the DPS fail to disclose the requested information, as is recorded in the present decision, until 31/1/2013, the CPC may impose an administrative fine for each day the infringement continues, as defined in section 30(8) of the Law.