Public policies to reduce switching costs linked to mandatory access to certain elements of the postal network in the EU and the effects of the retention costs

Abstract

Purpose: Our objective is to examine the switching costs that exist in the European postal service, where an ambitious process of opening up to competition has been carried out since 1997, as well as the different types of retention costs.   Theoretical Framework: The theoretical framework is determined by the sectoral regulatory framework regarding the liberalization of services of general economic interest in the EU, the experience of postal operators in recent decades and the changes experienced in the demand for postal services in the current context of profound technological change in the field of communication.   Design/Methodology/Approach: This research work is carried out through a systematic review of the relevant specialized literature, the study of the policy decisions adopted in the EU, the changes in the strategies of postal operators and the rigorous analysis of the evolution of the demand of the postal services in a context of rapid and profound change.   Finding: Inadequate regulation of the access to some elements of postal infrastructure or services within the scope of the universal postal service, such as the postcode system, address database, post office boxes, delivery boxes, re-direction and retour to sender service, can generate switching costs and thus limiting competition, with negative effects on the consumer surplus and social welfare. Standardization and access to these elements may be regulated separately   Research, Practical & Social Implications: This article proposes solutions to the technical functions of coordination between operators. Our proposals are in line with sectoral directives aimed at strengthening competition in the long term in the postal market.   Originality/Value: A correct classification of the change costs applied to the liberalized postal service is made. Likewise, a classification of retention costs. We must underline the progress that our proposals represent to reduce the costs of switching to elements of the postal network whose access is mandatory.