Monopolies Commission calls for complete privatization of Telekom and Post

"There is a considerable need for reform in Germany and Europe." This is the conclusion of the Monopolies Commission, which recommends that a new German government "set the framework conditions in such a way that companies can be internationally competitive" after the election. One of the independent advisory body's demands is to end the federal government's participation in Deutsche Telekom and Deutsche Post and to sell the remaining shares. Reason: "The remaining shareholdings continue to lead to a conflict of interest for the federal government."

"As the regulator and legislator, the federal government shapes the regulatory framework for the postal and telecommunications markets," the experts explain their concerns. "As a shareholder, it has an interest in the profitability of the companies. This conflicts with its goal of creating fair competitive conditions." The participation of the federal government also has a positive effect on the creditworthiness of both groups and therefore on their refinancing conditions compared to competitors. This distorts competition. A public sector participation for reasons of public service, on the other hand, is not necessary. Instead, the financial resources freed up could be used for infrastructure investments, for example.

In recent years, the Liberals in particular have been pushing for a sale of the shares still held by the federal government. The federal government holds a 16.5 percent stake in Deutsche Post via the state development bank KfW and a total of 27.8 percent in Deutsche Telekom. In 2024, KfW sold 4 percent of the shares in Deutsche Post and 2.2 percent of the shares in Deutsche Telekom. FDP leader Christian Lindner, among others, has already proposed that the expected millions in proceeds from a state sale of the Telekom and Post shares should flow into an investment fund to pay for the digitalization of infrastructure and education.

Telekom competitors back the sales appeal

There are also supporters of such approaches in the CDU/CSU and Green parliamentary groups. However, Deutsche Telekom CEO Timotheus Höttges pointed out back in 2017 that anyone calling for the federal government to exit would have to ask themselves "who might get on board" and whether the buyers were "interested in infrastructure security". It also remains unclear whether, when and, above all, how much future owners of the share package want to "invest in Germany".

Frederic Ufer, Managing Director of the competitors' association VATM, however, expressly welcomed the Monopolies Commission's proposal. A complete privatization is urgently needed: "For years, we have seen the unwholesome collision of interests of the state as shareholder, regulator and legislator." The legislator has created effective protection against foreign direct investment with the amendment to the Foreign Trade and Payments Act.

The Commission also speaks out against the efforts of the former EU Commission and the Council of Ministers to introduce a data toll. According to the paper, "regulation in the Internet interconnection market (fair share)" should be dispensed with. Big Tech cost sharing for network expansion is not necessary.

At the same time, however, the competition watchdogs are in favor of breaking up "concentrations of power in the digital sector": In the internet sector, "there are strong dependencies on the digital gatekeepers", they criticize. Digital monopolies should therefore be broken up where necessary. "Kill zones", which prevent investment and innovation, and "killer mergers", which block innovative companies, should be able to be prosecuted by the antitrust authorities to a greater extent than before. Especially for companies active in the field of artificial intelligence (AI), there are considerable competitive bottlenecks and "strong dependencies on a few providers of the necessary inputs".

"Winner-takes-most" structure in online markets

"Germany and Europe are increasingly losing competitiveness to other countries and regions," explains the Monopolies Commission, with a particular focus on key technologies such as AI, quantum computing and biotechnology. The gap between market leaders and laggards is also growing in Europe. Rising barriers to market entry are making it more difficult for new competitors to enter markets. This dynamic promotes a "winner-takes-most" structure in which a few companies continue to expand their profits and margins and increasingly dominate the markets. This creates dependencies. The digital economy is particularly susceptible to this.

The consultants are also concerned about stronger competitive elements in network expansion, for example in charging infrastructure, the hydrogen economy or in the telecommunications sector. Market-based award procedures such as auctions should be established as the standard, and network access and open access models should be promoted. In the energy sector, open competition solutions should be sought, for example when it comes to adapting the market design. A competition-driven combined capacity market should be created to secure the energy supply.

(vbr)