Royal Mail fails in competition fine appeal

• 12 November 2019
• Transport / Logistics Services

Royal Mail’s application to the Competition Appeals Tribunal to have its record £50 million fine withdrawn has failed.

The fine was imposed in August 2018 when Whistl was trying to compete in wholesale parcel delivery. Whistl complained that Royal Mail was abusing its dominant position in the market.

An Ofcom spokesperson said: “We found that Royal Mail pursued a deliberate strategy of pricing discrimination against Whistl, which was its only major competitor for delivering business mail.

“Royal Mail had a special responsibility to ensure its behaviour was not anti-competitive.

“We hope that our fine, which has been upheld in full by the Tribunal, will ensure that Royal Mail and other powerful companies take their legal duties very seriously.”

The Ofcom investigation found that Royal Mail had hiked its prices for final mile delivery in such a way that competitors like Whistl couldn’t compete on the middle mile where it had to use Royal Mail for the final mile.

Whistl said it was pleased at the Competition Appeals Tribunal Decision.”Royal Mail’s actions had a hugely negative impact on investment in, and the competitive health of, the UK postal sector,” Whistl said. The company is now looking at whether it has grounds to sue for damages.

Meanwhile, Royal Mail responded, “We are considering all legal options, including whether to seek permission to appeal and to request that payment of the penalty, which would otherwise become payable, be stayed pending any appeal. We will provide an update once we have completed our legal review.”