EC to launch competition inquiry over UPS/TNT merger

The European Commission (EC) is to probe potential competition concerns in the small parcels sector, particularly international express services, if UPS’s takeover of TNT Express goes ahead.

Dutch-owned TNT Express and US parcel giant UPS are two out of the four ‘integrators’ operating within Europe (integrators are companies that control an air and road small package delivery network throughout Europe and beyond and are capable of offering the broadest portfolio of such services). The other integrators classified by the EC that are present in Europe are DHL and FedEx.

As the proposed transaction would reduce the number of 'integrators' competing in Europe from four to three, the competitive constraints on a merged UPS/ TNT would be significantly reduced. This, according to the EC, would lead many Member States to a highly concentrated market for domestic and international express delivery services.

Commission VP in charge of competition policy Joaquín Almunia says: “The proposed acquisition could, in particular, reduce competition for the provision of the fastest express delivery services, to the detriment of direct customers and ultimately of European consumers. The EC needs to make sure that customers continue to have access to these services at competitive conditions."

The EC adds that opening of an in-depth inquiry does not prejudge the result of the investigation. The Commission now has 90 working days, until 28 November, to take a decision on whether the proposed transaction would significantly impede effective competition in Europe.