The European Commission is reviewing the EU regulatory framework for postal and delivery services, with a view to potentially introducing a new EU Delivery Act. As part of this review, the Commission considers whether regulation should cover e‑commerce parcel delivery services, reflecting concerns about whether parcel delivery markets operate under conditions of effective competition.
To inform this policy discussion, PostEurop members have commissioned Copenhagen Economics to assess the level of competition in the EU e-commerce parcel delivery markets. We assess whether market outcomes indicate any systemic competition problems, focusing on:
Overall, we find no evidence of structural competition problems in the EU e‑commerce parcel delivery markets. In our report, we have examined three key market characteristics indicative of a healthy competitive sector.
Structure: Several features indicate competitive structure in the EU e-commerce parcel delivery market, including bargaining power of e-merchants and the presence of multiple operators offering differentiated services. More dispersed market shares than in letter markets, combined with low entry barriers point to rivalry.
Conduct: We observe firm behaviours that broadly align with a competitive market, with moderate profitability, price differences between domestic and cross-border delivery reflecting costs, and active entry and expansion. Firms also compete on quality and innovation, while identified competition concerns between incumbent firms appear case-specific and adequately addressed by existing competition law.
Performance: Outcomes for end-consumers are broadly consistent with effective competition with high performance. Consumers have access to a wide range of accessible delivery options across locations. Prices appear affordable, with around 0.9 per cent of annual expenditure for frequent shoppers, and service quality is high, supported by reliable delivery and strong consumer satisfaction across key dimensions.
Drawing on our findings, we find that a new EU Delivery Act should refrain from imposing sector-specific regulation on the e-commerce parcel delivery market. This allows market forces to deliver high value to consumers while avoiding the risk regulatory failure in a competitive sector. This also implies that the postal universal service obligation (USO) should be narrow and focus on essential services, which the market is not providing. Further, including e-commerce parcel delivery in the USO would risk creating an uneven level playing field between universal service providers and other parcel delivery providers, as players providing similar services would be subject to different regulations.
This study was commissioned by PostEurop.
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