While watching the intense competition in Athens over the last two weeks, America was also introduced to the global shipping giant DHL, a sponsor of the American Olympic team.

One of DHL’s slick Olympic television ads ended with the tag line: “Competition. Bad for them. Great for you. “The “them” referred to Federal Express and United Parcel Service, rival companies in DHL’s bid to gain market share in America.

DHL is right: Fair competition can only lead to better products and lower prices for consumers. Unfortunately, DHL itself is the corporate equivalent of an athlete on steroids. Its entry into the American market has been performance-enhanced by government subsidies.

It turns out that DHL – founded in 1969 and named after Adrian Dalsey, Larry Hillblom, and Robert Lynn – isn’t a private company at all. It’s wholly owned by Deutsche Post, the German postal service. And while Germany launched plans to privatize Deutsche Post in the 1990s, the effort stalled and the government remains the majority owner, with only about 32% of the firm publicly traded.

The German government subsidizes Deutsche Post in a variety of ways. For instance, it enforces a monopoly on the delivery of letters within Germany. Privatization was supposed to benefit German consumers by allowing for competition and thus lower prices. Instead, because privatization never materialized, Germans must pay some of the highest postal rates in the world – almost twice as much as their fellow European Union citizens in Spain.

Meanwhile, Deutsche Post has used profits from its government-enforced monopoly to finance entry into markets other than letter delivery, both in Germany and abroad. In 2001, the European Commission fined Deutsche Post $23.4 million for using its monopoly profits to subsidize its commercial parcel business.

Although it was supposed to separate some of its business operations as part of the settlement of that case, Deutsche Post continued to abuse its monopoly powers.

In 2002, a new European Commission investigation concluded that Deutsche Post had benefited unfairly from government subsidies, and demanded that Deutsche Post repay the German state $884.3 million. Deutsche Post appealed that decision and the EU Court of Justice is expected to rule on the case toward the end of 2005.

It seems that Deutsche Post just can’t keep its monopoly and non-monopoly income straight. The obvious solution would be to simply privatize the company fully, but it’s not clear when – or if – that will ever happen. Meanwhile, Deutsche Post continues to spend aggressively, forcing its captive letter-sending German consumers to bear the costs of its expansion into the private sector.

Deutsche Post’s shopping spree began in 1997, when, to compensate for the anticipated loss of its letter-delivery monopoly, the German government gave the postal carrier permission to acquire companies and enter new markets. It has since acquired at least some part of about 60 companies.

Deutsche Post snatched up firms all over the world, including its 100% stake in DHL. Much of the buying was financed with billions of dollars in real estate given to the postal service by the German government. However, privatization never materialized and the monopoly remained in place.

The spending continues. Last year, DHL bought Airborne Inc., a company then ranked third in American air shipments, for $1.05 billion. Almost overnight, Deutsche Post captured 28% of America’s express delivery market.

Obviously, German mail-users and taxpayers have cause for concern because they are the ones paying for this frenzied expansion. Americans, though, should also take heed. It may seem like a sweet deal to have German taxpayers subsidizing our shipping. However, in the long run, such blatant market distortions will lead to less competition and higher prices.

We ought to welcome corporate competition among efficient private firms, but when one of the players is owned and subsidized by a foreign government, it’s simply not fair. DHL may have sponsored the American Olympic team this summer, but there’s nothing sportsmanlike about this corporate competitor.