Royal Mail refused competition hearing at Supreme Court

The UK Supreme Court has rejected Royal Mail’s request to appeal a £50 million fine made by regulator Ofcom for anti-competitive practices.

Royal Mail will not be able to appeal the case further. It had been unsuccessful at the Court of Appeal and the Competition Appeal Tribunal. It must now pay the £50 million fine plus interest and legal costs. The money is to be passed to HM Treasury.

Ian Strawhorne, Interim Director of Enforcement at Ofcom said, “We welcome the Court’s decision. All companies must play by the rules, and Royal Mail had a special responsibility to ensure its behaviour was not anti-competitive – its actions were unacceptable.

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

Ofcom fined Royal Mail £50 million for a breach of competition law after it had abused its dominant position by discriminating against its only major competitor that delivered letters, Whistl.

This stemmed from a complaint made by Whistl about changes to wholesale customers’ contracts in 2014. Whistl was expanding its business to compete directly with Royal Mail by delivering bulk mail business letters to certain addresses in the UK. This would have made Whistl the first company to challenge Royal Mail’s monopoly of the bulk mail delivery market.

Under the new pricing structure, any of Royal Mail’s wholesale customers that sought to compete with it by delivering letters in some areas of the UK would have to pay higher prices in the remaining areas where Royal Mail delivered the letters.

With the new pricing plans, Whistl ended plans to extend its delivery into new areas.

In a statement, Ofcom said, “Our investigation found Royal Mail’s actions amounted to anti-competitive discrimination against customers, such as Whistl, who sought to deliver bulk mail.”

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