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Home » Business News • UK Business News » Royal Mail Owner Faces £878 Million Class Action For Abusing Market Dominance
https://www.whatjobs.com/news/united-kingdom/uk-business-news/royal-mail-owner-faces-878-million-class-action-for-abusing-market-dominance
Royal Mail owner International Distribution Services (IDS) faces a £878 million class action claim over allegations of abusing its dominant market position in bulk mail services.
The newly formed Bulk Mail Claim Limited represents around 290,000 customers.
They say they were overcharged due to Royal Mail’s alleged anti-competitive behavior.
Bulk mail is used by businesses and organisations like retailers, utility companies, charities, and publishers.
It includes items like bank statements, council tax notices, charity appeals, weekly magazines, and energy bills.
The class action argues Royal Mail’s actions since 2014 have stifled competition.
It resulted in higher prices for collecting, sorting, and delivering bulk mail.
This legal challenge coincides with Czech billionaire Daniel Křetínský’s EP Group’s attempt to acquire IDS for £3.57 billion.
In 2018, Ofcom, the industry regulator, fined Royal Mail £50 million for abusing its dominant position in bulk mail delivery, a ruling that Royal Mail has unsuccessfully appealed.
“Royal Mail abused its dominant position, resulting in hundreds of thousands of bulk mail customers being overcharged”
The company also faces a separate £600 million claim from Whistl.
The company had to scale back operations in 2015, leading to 2,000 job losses.
This case is expected to reach the high court next year.
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Robin Aaronson of Bulk Mail Claim Ltd said: “Where there has been an abuse of dominant position, as has occurred in this case, it is important that those suffering loss are able to obtain redress.
“A collective claim is the only fair and efficient form of redress in this case, given that there are hundreds of thousands of affected customers and it would be commercially unviable for them to bring individual proceedings.”
Andrew Wanambwa, a partner at Lewis Silkin, the law firm aiding the claimants, said: “Royal Mail abused its dominant position, resulting in hundreds of thousands of bulk mail customers being overcharged.
“The purpose of this claim is to hold Royal Mail accountable for its actions and secure compensation for affected customers.”
Royal Mail said: “We confirm that we have received an application for a collective proceedings order from an entity called Bulk Mail Claim Ltd which we consider to be without merit and we will defend it robustly.”
The class action claim has been filed with the UK Competition Appeal Tribunal.
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