• International Workplace
  • 12 November 2019

Royal Mail loses appeal over £50m fine for breaking competition law

Royal Mail has lost its appeal against a £50m fine from media regulator Ofcom for anti-competitive behaviour against the parcels business Whistl, its largest competitor.

Royal Mail was handed the £50m penalty in August 2018 after Ofcom said the delivery firm “abused its position” by “discriminating” against Whistl.

It said the firm had abused its dominant position by penalising wholesale customers that sought to deliver bulk mail such as bank statements and council tax demands door to door.

Royal Mail appealed against the decision but the Competition Appeal Tribunal upheld the decision, although the company could now launch a fresh appeal.

Competition law promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement.

Speaking after the verdict, Ofcom 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.”

Royal Mail said:

“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.”

Confirmation of the fine came on the day that Royal Mail went to the high court in a legal bid to prevent strikes by postal workers in the run-up to Christmas. A verdict is expected on Wednesday.