The Liberalization of Postal Services – Israeli and European Perspectives

Abstract

On 7 December 2005 the Minister of Communications and the Minister of Finance signed a decree in accordance with which the Israeli Postal Authority was transformed into Israel Post Ltd., a government-owned company, as of 1 March 2006. Prior to that date, on 31 January 2006, the postal services underwent an important liberalization phase, whereby 50% of the bulk mail were officially opened to competition.

The European liberalization process has served as a model for the Israeli legislature. There is however a big difference. The Israeli legislature does not have the benefit (or burden) of the need to comply with the competition rules of the EC Treaty, especially those concerning undertakings entrusted with the operation of services of general economic interest, which have played a vital role in shaping the liberalization process in Europe. Therefore, despite the similarity in the overall aim to be achieved (better, more efficient and more cost-effective postal services), the debate regarding how this should be done is markedly different and so are the consequences for the liberalization process.

This paper critically analyzes, compares and evaluates the role of the legislature, the regulator and the courts in the liberalization process of postal services in the European Union and in Israel.

Keywords: Postal Services, Essential Facilities, Regulation, Privatization, Competition Law, Antitrust Law, Israeli Law, European Union Law

JEL Classification: K21, K23, K29