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

Ofcom fined company for ‘deliberate strategy of pricing discrimination’ against Whistl

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

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.

Ofcom handed Royal Mail a £50m penalty in August last year after it 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 on Tuesday, although the company could now launch a fresh appeal.

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 it was “disappointed by the decision.

“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.”

Separately, Royal Mail is waiting on a high court verdict after seeking an injunction against a planned strike by members of the Communication Workers Union (CWU).

The company has said that “potential irregularities” in the way that staff were balloted for strike action could render it unlawful.

Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

Royal Mail said it was particularly concerned by the threat of disruption to postal voting before the election, as well as disruption to services in the run-up to Christmas. However, the CWU has yet to schedule strike dates.

CWU workers last month backed industrial action by 97% on a turnout of almost 76%.

The vote could lead to the first national postal strike in a decade. The union said Royal Mail had breached an agreement put forward last year that included plans to reduce the working week.

The CWU said it “completely rejects and denies” Royal Mail’s claim.

The Guardian has approached Royal Mail for comment.


Rob Davies

The GuardianTramp

Related Content

Article image
Royal Mail fined record £50m for breaking competition law
Ofcom finds company abused its dominant position in bulk mail delivery

Julia Kollewe

14, Aug, 2018 @5:10 PM

Article image
Ofcom to investigate Royal Mail over delivery target failures
Regulator announces move after fifth of first-class deliveries arrived day or more late in year to April

Jasper Jolly

31, May, 2022 @2:23 PM

Article image
UK government rejects Royal Mail request to end Saturday deliveries
Company lobbied for removal of obligation, claiming six-day service is financially unsustainable

Jasper Jolly

08, Jun, 2023 @1:26 PM

Article image
Royal Mail brings forward last posting dates for Christmas
Service faces six days of strikes this month, as Ofcom says it should stop blaming pandemic for delays

Mark Sweney

02, Dec, 2022 @2:20 PM

Article image
Royal Mail fined £1.6m for late deliveries and stamp overcharging
Ofcom issues penalty for failure to meet postal target and second-class stamp error

Rob Davies

10, Jul, 2020 @11:16 AM

Article image
Royal Mail hopes to end Saturday letter deliveries as watchdog seeks evidence
Ofcom consults on universal service obligation, which requires deliveries to all UK addresses six days a week

Mark Sweney

05, Sep, 2023 @11:00 AM

Article image
Royal Mail closer to ending Saturday letter deliveries after Ofcom review
Research finds scrapping service would have no significant impact on customers

Mark Sweney

26, Nov, 2020 @11:15 AM

Article image
Royal Mail faces possible fine as regulator looks into late deliveries
Only 73.7% of first-class mail and 90.7% of second class met delivery targets, according to the postal service

Alex Lawson

15, May, 2023 @2:42 PM

Article image
Royal Mail CEO accused of ‘incompetence or cluelessness’ by MPs
Remarks come as regulator Ofcom asked to investigate if firm broke legal obligation on letter deliveries

Alex Lawson

17, Mar, 2023 @12:01 AM

Article image
Competition for Royal Mail could threaten universal service, MPs warn
Commons committee urges Ofcom to be vigilant about changes in market that might jeopardise six-day-a-week flat-rate service

Terry Macalister

12, Mar, 2015 @12:01 AM