The fine, which is considered small, was imposed after Deutsche Post agreed to create a separate parcel company that would buy services from Deutsche Post on the same terms as competitors.

The European Union's antitrust watchdog found Deutsche Post had offered large mail-order firms big discounts if they agreed to send all their parcels through them.

Deutsche Post "abused its dominant position by granting fidelity rebates and through engaging in predatory pricing in the market for business parcel services," the Commission said in a statement.

The company said the fine would not hit future profits as it had already made provisions which were reportedly as high as 50m euros.

The complaint

United Parcel Service complained to the Commission in 1994 that Deutsche Post was involved in predatory pricing by using profits from its monopoly of delivery of letters to subsidise its business parcel services.

After talks with the Commission, Deutsche Post agreed to split off the parcel unit by 1 January 2002 and establish it as a stand-alone entity that would compete like UPS or any other firm.

More investigations

The German postal service faces two other continuing investigations.

The Commission is investigating whether the German government gave state aid to Deutsche Post by setting prices too high in its monopoly letter delivery branch.