£50 million fine for Royal Mail by Ofcom

Ofcom has levied its largest ever fine on Royal Mail after an investigation off the back of a complaint from rivals Whistl over changes made to its wholesale customers’ contracts in 2014 that included price increases.

At the time Whistl was planning to compete with Royal Mail through delivering ‘bulk mail’ business letters to addresses in some of the UK. It would then be the first company to directly compete with Royal Mail’s monopoly.

According to the complaint, the wholesale price increases forced its competitors to pay higher prices in parts of the country that Royal Mail would deliver the items on their behalf (ie, where Whistl didn’t deliver itself).

The price hikes forced Whistl to suspend its expansion plans into those new areas.

Ofcom’s investigation found Royal Mail’s actions amounted to anti-competitive discrimination against customers, such as Whistl, who sought to deliver bulk mail.

Jonathan Oxley, Ofcom’s Competition Group Director, said: “Royal Mail broke the law by abusing its dominant position in bulk mail delivery.

“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.”

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