Royal Mail Faces £50 Million Fine for Breach of Competition Law
One of the leading courier companies in the United Kingdom, Royal Mail, was slapped with a £50 million fine by Ofcom for a serious breach of the competition law.
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The UK’s communications regulator arrived at this decision after thoroughly investigating the complaint filed by Whistl, one of Royal Mail’s wholesale customers, regarding the changes that the parcel company made to its customers’ contracts in 2014.
Royal Mail Attempting To Bully Competition
The investigation of Ofcom showed that Royal Mail demanded its customers who competed with it by delivering letters in some parts of the UK to pay higher prices in the remaining areas where it used Royal Mail for delivery.
Since Whistl happens to be among those delivering bulk mail when Royal Mail rolled out the new prices, Ofcom said what the latter did was clearly anticompetitive.
“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.” – Jonathan Oxley, Competition Group Director at Ofcom
Royal Mail said it will file an appeal against Ofcom’s decision because the price change it proposed was never implemented.
“For an allegation of abusive price discrimination to be established, the law is very clear. The relevant prices must be actually paid. And, the party paying such prices must be placed at a competitive disadvantage as a result. In this case neither of these essential elements exist.” – Royal Mail Group
In Royal Mail’s defence it turns out that the pricing structure proposed was never implemented and as such it shouldn’t be fined for being anti-competitive for something they didn’t do.
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Dave is a Co-Founder of eSeller365. For over 10 years he has been involved with eCommerce with a particular interest in the marketplaces and the huge opportunities available for sellers when utilizing a multi-channel strategy. After a year of being the UK’s youngest eCommerce consultant, he built an education platform called UnderstandingE that showed the world how to utilize Magento as the “Third Generation of Multi-Channel software”.
Dave has also created a YouTube channel dedicated to entrepreneurship and eCommerce as well as a podcast dedicated to mental health awareness. When Dave isn’t working his main interests include learning and playing Chess, researching the Crypto and NFT space, and trying to find the nearest beach.