UP Europe SA (established in Belgium) is one of the United Parcels Service group of companies which distributes parcels throughout the world.

It has office in all the Member States of the European Communities, including Germany, and is in competition with DHL International Ltd ("DHL").

On 11 May 1998 the Commission received a notification of a proposed concentration by which Deutsche Post AG (established in Germany) sought to acquire, by the purchase of 22.498% of DHL's shares, control of that company jointly with Deutsche Lufthansa AG and Japanese Airlines Company Ltd.

By decision of 26 June 1998, the Commission declared that concentration compatible with the common market.

Notwithstanding that decision, UPL maintained its earlier complaint of abuse, by Deutsche Post in particular, of a dominant position on the common market, prohibited by the Treaty

UPS claimed that Deutsche Post was able to acquire the shares in DHL only as a result of the revenue it obtained on the reserved postal market and that it was not entitled to use its exclusive rights for purposes other than complying with its obligation to provide the service of general economic interest with which it was entrusted.

By decision of 10 June 1999, the Commission rejected the complaint.

UPS brought an action before the Court of First Instance for annulment of that decision.

The Court of First Instance has dismissed the action. It held, first, that the fact that an exclusive right is granted to an undertaking does not preclude that undertaking from earningprofits from the activities reserved to it and does not preclude it from extending its activities into non-reserved areas.

However, the Court of First Instance held that the funds deriving from the monopoly, and used for the acquisition, must not derive from excessive prices or other unfair practices on the reserved postal market. Where there are grounds for suspecting an abuse of a dominant position, it is necessary to examine the source of the funds employed.

In the present case, UPS had not proved any abusive practice on the part of Deutsche Post on the reserved letter market and the fact that Deutsche Post possessed funds for acquiring the shares in DHL did not imply the existence of abusive conduct on the reserved market.

Note: An appeal, limited to points of law, may be brought before the Court of Justice against the judgment of the Court of First Instance within two months from its notification.

Unofficial document for media use only; not binding on the Court of First Instance. Available in all official Community languages. For the full text of the judgment, please consult our Internet page www.curia.eu.int  at approximately 3pm today. For further information please contact Fionnuala Connolly: Tel: (00 352) 4303 3355; Fax: (00 352) 4303 2731