(1)

On 2 February 1994, the Council imposed, by Regulation (EC) No 229/94 (2) (‘the original Regulation’), definitive anti-dumping duties on imports of ethanolamines (‘product concerned’) originating in the United States of America (‘USA’). On 20 July 2000 and following an expiry review investigation, these measures were extended for five years by Council Regulation (EC) No 1603/2000 (3) (the ‘first expiry review Regulation’).

(2)

On 23 October 2006, following the second expiry review investigation, the measures were extended for five more years by Council Regulation (EC) No 1583/2006 (4) (the ‘second expiry review Regulation’).

(3)

On 19 January 2010 and following a third expiry review investigation, the anti-dumping duties on imports of ethanolamines originating in the USA were imposed for two more years by Council Implementing Regulation (EU) No 54/2010 (5) (the ‘third expiry review Regulation’).

(4)

On 9 April 2010, The Dow Chemical Company (‘Dow Chemical’) filed an application for partial annulment of Implementing Regulation (EU) No 54/2010.

(5)

On 12 March 2011, the European Commission (the ‘Commission’) published a Notice of impending expiry in the Official Journal (6).

(6)

Following a request lodged by BASF AG, Ineos Europe AG, and Sasol Germany GmbH (the ‘Union industry’), the Commission initiated an expiry review on 21 January 2012 (the ‘fourth expiry review’) (7).

(7)

A partial interim review limited to dumping as regards Dow Chemical was initiated on 11 April 2012 (8).

(8)

Following an application lodged (9) on 9 April 2010, the General Court annulled by its judgment of 8 May 2012 in Case T-158/10 (10) (the ‘Judgment’), the third expiry review Regulation in so far as it concerns Dow Chemical.

(9)

Following the Judgment, a notice (11) was published concerning the partial reopening of the third expiry review investigation concerning imports of ethanolamines originating in the USA. The reopening was limited in scope to the implementation of the Judgment as far as the determination of a likelihood of a continuation or recurrence of dumping during the review investigation period (the ‘RIP’), including the spare production capacity of ethanolamines in the USA, is concerned.

(10)

In that notice, parties were informed that, in view of the Judgment, imports into the European Union of ethanolamines manufactured by Dow Chemical are no longer subject to the anti-dumping duties imposed by the third expiry review Regulation and that definitive anti-dumping duties paid pursuant to that Regulation on imports of ethanolamines should be repaid or remitted in accordance with the applicable customs regulation.

(11)

The Commission officially advised the exporting producers, the importers and users known to be concerned and the Union industry of the partial reopening of the investigation. Interested parties were given the opportunity to make their views known in writing and to request a hearing within the time limit set out in the notice.

(12)

All parties who so requested within that time limit, and who demonstrated that there were particular reasons why they should be heard, were granted the opportunity to be heard.

(13)

Representations were received from two exporting producers, three Union producers and a user of the product concerned.

(14)

It is recalled that the reason for the annulment of the contested Regulation was the General Court’s finding that the third expiry review Regulation contained two errors of assessment: (i) a finding of continued dumping during RIP and, therefore, on that basis, a finding of a likelihood of continuation of dumping; and (ii) the determination that the spare production capacity of ethanolamines in the United States amounted to 60 000 tonnes.

(15)

The Union industry acknowledged that the Judgment questioned the methodologies employed by the Institutions to quantify the spare capacity production in the USA. However, the Union industry maintained its position that basing the actual production capacity on 90 % of the nameplate capacity, as the institutions had done, is overly conservative as it is common and accepted for companies to exceed the nameplate capacity. Basing themselves on published market data allegedly sourced from PCI Xylenes & Polyesters (‘PCI’), they concluded that there was indeed spare capacity in 2008 and onwards.

(16)

Moreover, the Union industry considered that market conditions had not changed materially since the publication of the third expiry review Regulation and found several reasons to conclude that there is a likelihood of a recurrence of dumping. In this respect, it invoked the continuation of the US production capacity over domestic demand since the RIP; the material capacity expansions in third countries after 2009 which would have made US export markets increasingly self-sufficient; the existence of anti-dumping measures imposed or likely to be imposed soon in third countries; the increase of MEG (monoethylene glycol) capacity production from 2009 onwards; and the proposal in the USA to include some of the ethanolamines in the list of products with potential harmful effects to health which could ultimately have an impact in domestic consumption.

(17)

Dow Chemical expressed its doubts about the legality of the re-opening of the investigation, arguing that there is no specific provision in the basic Regulation allowing for that. This exporting producer also alleged that the re-opening would be in conflict with the 15-month statutory deadline set out in Article 11(5) of the basic Regulation for the completion of review investigations.

(18)

Dow Chemical further claimed that the Judgment would not require any implementing measure and that the Commission could not legally remedy the aspects of the contested Regulation since each of the substantive grounds that led to the adoption of the Regulation was either annulled by the General Court or contested. Dow Chemical therefore considered that the only legal way to remedy those aspects of the third expiry review Regulation would be to repeal the existing measures.

(19)

A user in the Union, Stepan Europe (‘Stepan’), submitted that the legal consequence of the judgment could only be that the measures imposed by the third expiry review Regulation should be withdrawn as they had been imposed on the basis of an erroneous analysis. Similar views were expressed by the exporting producer Huntsman Petrochemical Corporation LLC (‘Huntsman’). Indeed, Stepan and Huntsman argued that the Court held that, during the RIP, the country-wide dumping margin was negative and therefore no continuation of dumping could be established. Stepan considered that the institutions should hence have examined if there was a likelihood of recurrence of dumping; yet the third expiry review Regulation had been silent on this.

(20)

Moreover, Stepan stressed that, would the notion of continuation of dumping be interpreted on an individual company basis, the institutions should have concluded that there was no continuation of dumping for Dow Chemical as, according to the Court, the company represented more than 85 % of all imports from the USA, and therefore they should have considered whether dumping by Dow Chemical was likely to recur. For the other exporting companies, it was established that there had been dumping and therefore the institutions should have established whether dumping was likely to continue. The likelihood of continuation of dumping analysis was mainly based, according to Stepan, on a country–wide spare capacity in the USA of 60 000 tonnes. Given the Court’s finding that the institutions erred in assessing the spare capacity in the USA and given that, according to Stepan, the spare capacity was closer to at the most 8 000 tonnes, it was no longer possible to sustain that the other exporting companies were likely to continue dumping. The institutions would have needed to also analyse and establish the likelihood of recurrence of dumping.

(21)

Hunstman also based its analysis on the assumption that the Judgment confirmed that there was no spare capacity in the USA during the RIP and that it was therefore unlikely that an increased amount of ethanolamines would be exported into the Union on that basis. They claimed that it was therefore also not necessary to analyse other factors such as the impact of trade defence measures in third countries, the possible development of demand in the USA and in other markets or the downward pressure of prices. Moreover, Huntsman argued that, in the light of the Court’s finding of the lack of spare capacity in the USA during the RIP, it was no longer possible for the Commission to re-analyse the likelihood of recurrence of dumping and of injury and to conclude in the framework of this partial re-opening that there was a likelihood of recurrence of injurious dumping. Yet, were the Commission able to revisit the likelihood of recurrence of dumping and of injury, Huntsman considered that there would be no evidence to demonstrate that the requirements of Article 11(2) of the basic Regulation would be met. As regards the likelihood of recurrence of dumping, Huntsman opined that, on the basis of the finding that during the RIP there was no dumping for Dow Chemical, the biggest exporter by far, there was no likelihood of recurrence of dumping on a country-wide basis after the RIP if the anti-dumping duties would be withdrawn.

(22)

According to Huntsman, the recurrence of injury would be unlikely in view of the absence of unused production capacity which results in very little leeway for increasing exports to the Union after the RIP. Huntsman maintained that such conclusion is corroborated by the fact that, according to the SRI report (12), the expected growth of consumption in the USA does not differ significantly from that of the other markets.

(23)

Huntsman raised that if the Union industry would have suffered from any injury, this would have been attributed to the effects of the economic crisis and not to imports from the USA. The mere exacerbation of the negative impact of the crisis through imports could not permit a finding of a likely recurrence of injury caused by the mentioned imports.

(24)

In respect of the alleged illegality of the reopening (recitals 17-18), it is recalled that in case C-458/98 P (the ‘IPS judgment’), the Court of Justice recognised that in cases where a proceeding consists of several administrative steps, the annulment of one of those steps does not annul the complete proceeding. The anti-dumping proceeding is an example of such a multi-step proceeding. Consequently, the annulment of the amending Regulation in relation to one party does not imply the annulment of the entire procedure prior to the adoption of that Regulation (13). Moreover, according to Article 266 of the Treaty on the Functioning of the European Union (TFEU), the Union institutions are required to comply with the judgment. In the light of the above, the claim that there is no legal basis for the partial reopening of a review investigation was found to be unwarranted.

(25)

The claim that the introduction of deadlines to conclude anti-dumping investigations prevents the Commission from extending the investigation beyond the 15-months statutory limit (recital 17 above) was also found to be unwarranted. It is considered that this deadline is not relevant for the implementation of a Court judgment. Indeed, such deadline only governs the completion of the initial review investigation from the date of initiation to the date of definitive action, and does not concern any subsequent action that might have to be taken for instance as a result of judicial review. The consequence of accepting such claim would make it impossible for the institutions to take account of the General Court’s findings (as Article 266 TFEU requires). Indeed, the General Court’s judgment will always be handed down at a time when the deadline for the investigation has expired. Furthermore, it is noted that any other interpretation would mean that, for example, a successful legal action brought by one party would be without any practical effect for that party if the expiry of the time limit to conclude the original investigation would not permit the implementation of a judgment of the General Court. This would be at odds with the principle that all parties should have the right to effective judicial review.

(26)

Concerning the claim that the Commission would not be able to legally remedy the errors of assessment found to be contained in the contested Regulation and that the only mean to implement the judgment is to repeal the existing measures (recital 18 above), the following should be noted. The Court has already established that the annulment of a Regulation also implies the possibility of remedying the aspects of the amending Regulation which led to its annulment, while leaving unchanged the uncontested parts which are not affected by the judgment — as was held in the IPS judgment. The institutions are therefore required to have regard not only to the operative part of the judgment but also to the grounds which led to the judgment and constitute its essential basis, in so far as they are necessary to determine the exact meaning of what is stated in the operative part (14). The procedure for replacing an illegal measure may thus be resumed (15). Hence, this claim is also considered to be unwarranted.

(27)

The General Court, as also noted by Stepan and Hunstman (see recital 19), found that, during the investigation that resulted in the adoption of the third expiry review Regulation, the institutions could not have come to the conclusion that dumping had continued during the RIP, nor that there was a likelihood of continuation of dumping. The vast majority of imports from the USA namely, as the Court noted, more than 85 % from Dow Chemical, had entered the Union at non-dumped prices. Moreover, that situation should have resulted in a finding that the weighted average margin for imports of the product at issue originating in the USA was negative. The Court concluded that the institutions were therefore obliged to demonstrate that there was a likelihood of a recurrence of dumping (16).

(28)

The analysis of the likelihood of the recurrence of dumping is in this case, as all interested parties recognise explicitly or implicitly, linked to the calculation of the spare production capacity in the USA. Some interested parties contend that the General Court confirmed that there was no significant spare capacity in the USA during the RIP. The Court found that the calculation methodology resulting in a spare production capacity of ethanolamines of 60 000 tonnes during the RIP was confusing and that the resulting number of 60 000 tonnes was in conflict with the evidence relied on in the case (17).

(29)

As mentioned in recital 15, the Union industry has submitted that, based on PCI data, there would be a country-wide spare capacity in 2008 exceeding 60 000 tonnes. It is however noted that, in the calculation submitted by the Union industry, the total US production capacity had been used, i.e. no downwards adjustment to 90 % thereof had been done.

(30)

As regards the allegations regarding the calculation of the spare capacity during the RIP, it is noted that two exporting producers cooperated with the third expiry review investigation. During that investigation, it was established that INEOS Oxide LLC (‘INEOS’) did not have any spare capacity during the RIP, whereas Dow Chemical had some. The verified information shows that Dow Chemical did not use its spare capacity to engage in low-price exports during the RIP although it could have done so given the low level of the measures when expressed at an ad valorem equivalent.

(31)

Moreover, the cooperating companies, Dow Chemical and INEOS, represented during the RIP together 91,6 % of exports from the US into the Union. The total exports of Dow Chemical and INEOS amounted to 30 000-35 000 tonnes; exports from non-cooperating companies were not more than 3 000-4 000 tonnes. The country-wide dumping margin during the RIP was de minimis and imports from non-cooperating companies represented less than 1 % of the Union market. For confidentiality reasons the above figures have either been given in the form of ranges or are not exact.

(32)

As mentioned in recital 16, the Union industry referred to various factors which would indicate that, according to them, there was still a likelihood of a recurrence of dumping after 2008. However, market conditions have not changed materially since the publication of the third expiry review Regulation. Those circumstances are also acknowledged by the Union industry. However, it should be noted that as mentioned in recitals 30 and 31, given the low level of the measures and the lack of spare capacity from INEOS as well as the absence of dumping from Dow Chemical, there is no indication that the repeal of the measure would be likely to change the situation.

(33)

An exporting producer commented that the third expiry review should not have concluded with Implementing Regulation (EU) No 54/2010 imposing measures. The exporting producer requested that measures be repealed with retroactive effect so that all duties paid since the date of entry into force of Implementing Regulation (EU) No 54/2010 be reimbursed to all importers who duly paid them.

(34)

That claim is rejected, as exporting producers other than Dow Chemical could also have brought an action for annulment against the Regulation — which was annulled only in so far as it concerned the applicant, Dow Chemical. Therefore, according to the principle of legal certainty and following the case-law of the Court (18), the Regulation became definitive as regards the other exporting producers.

(35)

Taking account of the comments made by parties and the analysis thereof, it was concluded that the implementation of the Judgment implies that during the investigation that resulted in the adoption of Implementing Regulation (EU) No 54/2010, the institutions could not have come to the conclusion that dumping had continued during the RIP, nor that there was a likelihood of continuation of dumping. Moreover, the institutions should also have concluded that there was no likelihood of recurrence of dumping.

(36)

On the basis of the above, the anti-dumping duty on ethanolamines should not have been reintroduced. With respect to Dow Chemical, it should be recalled that Implementing Regulation (EU) No 54/2010 has already been annulled in so far as Dow Chemical is concerned by the judgment of the General Court in case T-158/10. Therefore, for the sake of clarity, it should be pointed out that, with regard to imports of ethanolamines from Dow Chemical, the anti-dumping duties are no longer in force as of the date of entry into force of Implementing Regulation (EU) No 54/2010 (23 January 2010).

(37)

In light of the above, and recital 35 in particular, it is considered that the fourth expiry review should be terminated without reimposing a duty. With regard to Dow Chemical, the fourth expiry review was deprived of its object by the Judgment and no legal basis exists for the collection of anti-dumping duties on imports from Dow Chemical as of 23 January 2010.

(38)

Taking account of the findings summarised in recital 35 above, it is considered that the review should be terminated, since the basis for the very existence of the measures, i.e., a finding of a likelihood of continuation or recurrence of injurious dumping, is missing.

(39)

All parties were informed of the essential facts and considerations on the basis of which it was intended to recommend that the existing measures be terminated. They were also granted a period within which they could make representations subsequent to that disclosure. Their comments were duly considered, but were not such as to change the conclusions.

(40)

It follows from the above that the partial reopening investigation should be terminated and that the anti-dumping measures on imports of ethanolamines originating in the USA should be repealed. With respect to imports of ethanolamines from Dow Chemical, since Implementing Regulation (EU) No 54/2010 had already been annulled in so far as Dow Chemical is concerned, the measures are not in force as of the date of entry into force of Implementing Regulation (EU) No 54/2010 (23 January 2010).

(41)

The fourth expiry investigation concerning anti-dumping duties in force on imports of ethanolamines originating in the USA should also be terminated without reimposing a duty. With respect to imports from Dow Chemical, that expiry review has been deprived of its object.

(42)

The partial interim review limited in scope to the examination of dumping should be terminated on the basis of the repeal of the existing measures,

(1)

On 3 October 2012 Magyar Posta Zrt. transmitted a request pursuant to Article 30(5) of Directive 2004/17/EC to the Commission by e-mail. In accordance with Article 30(5) first subparagraph, the Commission informed the Hungarian authorities thereof by letter of 19 October 2012. The Commission requested additional information from the Hungarian authorities by e-mail of 22 November 2012, from the relevant national Regulatory Authority (2) by e-mail of 7 January 2013, and from the applicant by emails of 12 November 2012 and of 7 January 2013. Additional information was transmitted by the Hungarian authorities by e-mail of 13 January 2013, by the national Regulatory Authority on 21 January 2013 and by the applicant on 20 November 2012 and 15 January 2013 respectively.

(2)

The request submitted by Magyar Posta concerns certain postal services as well as certain services other than postal services provided by the Magyar Posta on the territory of Hungary. The services concerned are described as follows in the request:

(3)

Magyar Posta provides the above services, with the exception of contract logistics and, to a certain extent, domestic pallet services, in the so-called Courier, Express and Parcel (CEP) sector of Hungary. The CEP sector is a segment of the freight transport market and postal market, which provides time guaranteed services, whereby the service provider undertakes an obligation to the sender to deliver the item within a specified period or at a specific point in time.

(4)

Article 30 of Directive 2004/17/EC provides that contracts intended to enable the performance of one of the activities to which Directive 2004/17/EC applies shall not be subject to that Directive if, in the Member State in which it is carried out, the activity is directly exposed to competition on markets to which access is not restricted. Direct exposure to competition is assessed on the basis of objective criteria, taking account of the specific characteristics of the sector concerned. Access is deemed to be unrestricted if the Member State has implemented and applied the relevant EU legislation opening a given sector or a part of it. This legislation is listed in Annex XI to Directive 2004/17/EC, which, for the postal sector, refers to Directive 97/67/EC.

(5)

The application concerns postal services such as domestic standard consumer parcel services, domestic standard business parcel services, domestic express parcel services, domestic courier parcel services and also other services than postal services, namely those services referred to as domestic pallet services and contractual logistics.

(6)

Hungary has implemented and applied Directive 97/67/EC as amended by Directive 2002/39/EC and Directive 2008/6/EC, using the possibility pursuant to Article 3(1) of the latter to reserve certain items of correspondence (3) until 31 December 2012 for the designated universal service provider, Magyar Posta (4). None of the services concerned by the present request were reserved at the time of the request. As Hungary has reached the level of market opening provided for under the legislation listed in Annex XI to Directive 2004/17/EC, access to the market should be deemed not to be restricted in accordance with the first subparagraph of Article 30(3) of that Directive. Direct exposure to competition in a particular market should be evaluated on the basis of various criteria, none of which are, per se, decisive.

(7)

In respect of the markets concerned by this decision, the market share of the main players on a given market constitutes one criterion which should be taken into account. Another criterion is the degree of concentration on those markets. As the conditions vary for the different activities that are concerned by this Decision, the examination of the competitive situation should take into account the different situations on different markets.

(8)

This Decision is without prejudice to the application of the rules on competition. In particular, the criteria and the methodology used to assess direct exposure to competition under Article 30 of Directive 2004/17/EC are not necessarily identical to those used to perform an assessment under Article 101 or 102 TFEU or Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (the EC Merger Regulation) (5).

(9)

The Commission has held in previous decisions taken on the basis of the Merger Regulation (6) that the market for parcel delivery services can be segmented as follows:

(10)

The applicant takes the view that the relevant product markets for parcel delivery services are those listed in recital 2 above. This approach is generally in line with Commission previous practice. Nevertheless, the applicant assessed the domestic B2X market as a whole (i.e. without distinguishing the B2B and B2C segments) which may not be fully in line with previous Commission practice (9).

(11)

The applicant argues that Magyar Posta does not differentiate between B2B and B2C services in terms of available prices, and that it does not distinguish the services on the basis of addressee groups. This argument is held up also by the Hungarian Authorities (10), which in addition points out that according to the information available on websites of the main competitors of Magyar Posta, on the B2X standard post parcels, there is no distinction made in terms of published prices, as to whether parcel recipients are consumers or businesses.

(12)

Previous Decisions (11) under Article 30 of Directive 2004/17/EC, concerning post parcels made a distinction between B2B and B2C standard post parcels. However, in all cases the result of the assessment for both markets was the same, which may be seen as an indication of the fact that the product market definition could have been left open.

(13)

Moreover, it appears from the information provided by the National Regulatory Authority (12), that in both scenarios (if two separate markets are considered for B2B and B2C standard post parcels, or only one market for B2X standard post parcels) the result of the assessment of the competitive situation would be the same.

(14)

Based on the information on recitals 9 to 13, for the purposes of the assessment under this Decision and without prejudice to competition law, it can be considered that the relevant product market is B2X, while the precise definition of the relevant market can be left open as the result of the analysis remains the same whether it is based on a narrow or a broader definition.

(15)

Previous Commission Decisions under Article 30 of Directive 2004/17/EC (13) considered the express and courier parcels services as one product market. The applicant assumes that express and courier parcels services form part of different markets. For the purposes of the assessment under this Decision and without prejudice to competition law, it can be considered that the relevant product markets are express parcel services and courier parcel services, while the precise definition of the relevant market can be left open as the result of the analysis remains the same whether it is based on a narrow or a broader definition.

(16)

Domestic pallet services are part of the so-called freight forwarding markets, which have also been assessed in previous Decisions under the Merger Regulation. In previous cases, freight forwarding has been defined (14) as the ‘organisation of transportation of items (…) on behalf of customers according to their needs’. Although some further product markets delineations were considered in previous cases (i.e. between domestic and international freight forwarding services (15), or between different modes of transport (16)) in this stance, given that the market definition has no decisive impact on the outcome of the assessment under Article 30 of Directive 2004/17/EC, no further delineation of the market will be considered, for the purposes of this assessment.

(17)

Previous decisions under the Merger Regulation defined (17) contract logistics as: ‘the part of the supply chain process that plans, implements and controls the efficient, effective flow and storage of goods, services and related information from the point of origin to the point of consumption in order to meet customer’s requirements’. The Commission assessed further possible distinctions (18) (i.e. between domestic and cross border services, by reference to the types of goods handled or the industry serviced, or between lead logistics providers and traditional contract logistics service providers) but in the end the precise scope of the product market definition was left open (19). The applicant follows also the Commission’s position. In the present case, given that there are no indications that further distinction is needed, for the purposes of this decision and without prejudice to competition law, the product market is defined as contract logistics.

(18)

In conclusion, taking due account the above, for the purposes of this Decision, and without prejudice to competition law relevant product markets shall be those listed in recital 2.

(19)

In its practice (20), the Commission has taken the view that the markets for domestic parcel delivery services and any segments thereof are national in scope. This segmentation is mainly based on the fact that such services are provided at national level. The applicant’s position is in line with Commission practice.

(20)

Given that, in this case, there are no indications of a wider or smaller geographical scope, for the purposes of evaluating whether the conditions laid down in Article 30(1) of Directive 2004/17/EC are fulfilled, and without prejudice to competition law, the relevant geographic market is considered to be the territory of Hungary.

(21)

As regards, domestic pallet services and contract logistics, the applicant considers that the markets are national in scope. As the services concerned by the request are domestic services, and Magyar Posta is active only in Hungarian market, for the purposes of this decision, the relevant geographic market is considered to be the territory of Hungary.

(22)

It should be kept in mind that the aim of the present Decision is to establish whether the services concerned by the request are exposed to such a level of competition (on markets to which access is not restricted within the meaning of Article 30 of Directive 2004/17/EC) that this will ensure that, also in the absence of the discipline brought about by the detailed procurement rules set out in Directive 2004/17/EC, procurement for the pursuit of the activities concerned here will be carried out in a transparent, non-discriminatory manner based on criteria allowing purchasers to identify the solution which overall is the economically most advantageous one.

(23)

In this context, it should be recalled that the product markets defined above are generally characterised by a large number of operators. However, according to the available information (21), out of these only Magyar Posta is a contracting entity in the sense of Directive 2004/17/EC. The procurement of Magyar Posta’s competitors, for the purpose of carrying out the activities described above is not subject to the provisions of Directive 2004/17/EC. Consequently, for the purposes of this decision and without prejudice to competition law, the market analysis will not focus on the general degree of competition on a given market, but will assess whether or not the activities of Magyar Posta are exposed to competition on markets to which access is not restricted.

(24)

Standard consumer parcel services must be considered apart, as they satisfy different needs of demand (universal postal service) in relation to commercial parcels, where the technological process of providing this service and operational solutions employed usually differ significantly. In respect of these services, Magyar Posta’s market position is very strong with an estimated market share that has remained relatively stable over the period 2008-2011 at the order of around 80 % by value. The main competitor has a market share of approximately […], while the rest of the main market players have market shares of under […].

(25)

The Commission also notes that in spite of the continuous expansions of different competitor’s networks, there is currently a considerable difference in size of Magyar Posta network compared to its competitors (22).

(26)

It should therefore be concluded that the category of services examined here is not directly exposed to competition in Hungary. This is in line with the opinion of the Hungarian Authorities (23). Consequently, Article 30(1) of Directive 2004/17/EC does not apply to contracts intended to enable the pursuit of those activities in Hungary.

(27)

In respect of B2X standard parcel services, according to available information (24), Magyar Posta’s market share was around 35 % by volume in 2011, and it was second placed after the market leader who held 40 % of the market share, while the third competitor had also a 15 % market share. These factors should be taken as an indication of direct exposure to competition of Magyar Posta, on the B2X standard parcel services.

(28)

Magyar Posta’s market share of the market for domestic express parcel services has been steadily falling over the period from 2008 to 2011, from approx. 55 % by value (25) in 2008 to round 41 % in 2011, by value. The aggregate market share of the two biggest competitors amounted to slightly over 22 % by value in 2008 and increased to around 30 % by value in 2011, i.e. almost three quarter of Magyar Posta’s market share, at which level they would be able to bring a significant competitive pressure to bear on Magyar Posta (26). These factors should therefore be taken as an indication of direct exposure to competition.

(29)

According to the applicant, the market for courier parcel services is not highly concentrated. Eight companies account for 60-67 % of the relevant market, by value. The market is dominated by three companies, but their cumulated market share is less than 50 % over the last four years.

(30)

Magyar Posta’s market share of the market for domestic courier parcel services was between 2 and 3 % by value over the last four years. These factors should therefore be taken as an indication of direct exposure of Magyar Posta to competition.

(31)

The market size of domestic pallet services is the second smallest one in the CEP sector in Hungary, and given its marginal importance, the market has only few permanent operators. Magyar Posta market share decreased, by value, from 67,6 % in 2008 to 38,7 % in 2010, and then increased in 2011 to 56,7 %, by value. The first competitor increased its market shares steadily between 2008 and 2011. The cumulated market shares of the second and third competitors ranged between 20 % and 49 % between 2008 and 2011, at which level they would be able to bring a significant competitive pressure on Magyar Posta.

(32)

Moreover, Magyar Posta’s request refers only to services provided within the CEP sector. In addition, pallet services are also provided by undertakings outside the CEP sector.

(33)

The factors listed above in the above two recitals shall therefore be taken as an indication of direct exposure of Magyar Posta to competition. This opinion is also endorsed by the Hungarian Authorities (27).

(34)

The market shares of Magyar Posta in this segment are below 1 %. The market is characterised by a large number of market players (28) and it is seen as a very dynamic market. These factors should therefore be taken as an indication of direct exposure to competition.

(35)

In view of the factors examined in recitals 2 to 34, the condition of direct exposure to competition laid down in Article 30(1) of Directive 2004/17/EC should be considered to be met in Hungary in respect of the following services:

(36)

Since the condition of unrestricted access to the market is deemed to be met, Directive 2004/17/EC should not apply when contracting entities award contracts intended to enable the services listed in points (a) to (e) of recital 35 to be carried out in Hungary, nor when design contests are organised for the pursuit of such an activity in this country.

(37)

This Decision is based on the legal and factual situation as of October 2012 to January 2013 as it appears from the information submitted by Magyar Posta and the Hungarian Authorities. It may be revised, should the conditions for the applicability of Article 30(1) of Directive 2004/17/EC be no longer met, following significant changes in the legal or factual situation.

(38)

Nevertheless, the condition of direct exposure to competition laid down in Article 30(1) of Directive 2004/17/EC should be considered not to be met with respect to domestic standard consumer parcel services, on the territory of Hungary.

(39)

Since the domestic standard consumer parcel services continue to be subject to Directive 2004/17/EC, it is recalled that procurement contracts covering several activities should be treated in accordance with Article 9 of Directive 2004/17/EC. This means that, where a contracting entity is engaged in ‘mixed’ procurement, that is procurement used to support the performance of both, activities exempted from the application of Directive 2004/17/EC and activities not exempted, regard must be had to the activities for which the contract is principally intended. In the event of such mixed procurement, where the purpose is principally to support the domestic standard consumer parcel services, the provisions of Directive 2004/17/EC are to be applied. Where it is objectively impossible to determine for which activity the contract is principally intended, the contract is to be awarded in accordance with the rules referred to in Article 9(2) and (3) of Directive 2004/17/EC.

(40)

The measures provided for in this Decision are in accordance with the opinion of the Advisory committee for Public Contracts.