Royal Mail fined £50m for breaching competition law

UK communications regulator Ofcom has fined Royal Mail a record £50 million for breaching competition law.

According to Ofcom, Royal Mail discriminated against wholesale customers such as Whistl by seeking to increase the price of bulk mail deliveries. In effect, higher amounts were charged to wholesalers who could potentially compete directly with Royal Mail for mail delivery services.

Whistl had been looking to expand its own mail delivery service and compete with Royal Mail at the time, but still used Royal Mail services in some areas. The company filed a complaint with Ofcom after the price increase was proposed in 2014.

Credit: Joanna Kosinska

“Royal Mail broke the law by abusing its dominant position in bulk mail delivery,” said Jonathan Oxley, competition director at Ofcom. “All companies must play by the rules. Royal Mail’s behaviour was unacceptable and it denied postal users the potential benefits that come from effective competition.”

Royal Mail has described the decision as “without merit and fundamentally flawed”, pointing out that the 2014 price change was never actually implemented, but had been designed to protect its service from “cherry picking” letter delivery and decline in mail volumes.

Royal Mail said it will lodge an appeal with the Competition Appeal Tribunal.

(Source: The Guardian)