DespatchBay fined for anti-competitive agreement with Parcelforce

Marketplace sellers may have unwittingly been paying over the odds for their shipping if they used Royal Mail Parcelforce or purchased their services through the SaleGroup DespatchBay service. OfCom have provisionally found that the two companies admit breaking competition law through an anti-competitive agreement.

The two companies had agreed not to poach each other’s customers and even went so far as The SaleGroup sharing its customer list with ParcelForce, with the aim of making sure each company could avoid offering services to the other’s customers.

The two companies managed the anti-competitive agreement through regular email correspondence, with one usually asking the other to withdraw a quote provided to certain customers. Some of these offers had undercut the price a customer was paying at the time. So when the quotes were withdrawn, this prevented customers from paying lower prices for the same parcel delivery services.

“Anti-competitive agreements like the one between Royal Mail and the SaleGroup are designed to restrict competition, and they often lead to customers paying higher prices as a result.

This kind of behaviour is a serious breach of competition law and unacceptable.”
– Gaucho Rasmussen, Director of Investigations and Enforcement, Ofcom

Royal Mail are getting away with this one so far as financial penalties are concerned, although doubtless marketplace sellers might think twice as to whether they are getting a competitive price or not. Under the CMA’s leniency policy, the first company to report an anti-competitive agreement of this nature can receive immunity from fines… so long as they report themselves before an investigation is started.

The SaleGroup who as well as Parcelforce also offer services through DX, Yodel DHL and Royal Mail, must be kicking themselves for not coming clean and dobbing Royal Mail in have accepted a fine of £40,000. Ofcom point out that this is a significant fine for the SaleGroup, given the small size of the company.

Ofcom have issued their provisional decision to Royal Mail and the SaleGroup. Both companies have admitted to breaking competition law, and the SaleGroup has agreed to settle the case. They aim to issue and publish their final decision shortly.