Competition regulator Ofcom has issued a Statement of Objections to Royal Mail after it provisionally found that the post had breached competition law regarding bulk mail delivery services known as ‘access services’. Access services are where large customers or other postal organizations hand over partially sorted mail to Royal Mail for final sortation and delivery.
Ofcom launched an investigation into the changes in price and terms and conditions of Royal Mail’s access services after TNT Post UK, now Whistl UK, made a complaint in January 2014. Royal Mail subsequently suspended the planned changes in March 2014 and withdrew them completely in March 2015.
When setting out its provisional view, Ofcom said, “The Statement of Objections issued today sets out Ofcom’s provisional view that Royal Mail’s changes to the prices, terms and conditions for the provision of access services included unlawful price discrimination.
“Specifically, the Statement of Objections alleges that the changes to Royal Mail’s wholesale prices for bulk mail delivery services contained a differential in pricing which meant that, in practice, higher access prices would be charged to access customers that competed with Royal Mail in delivery than to those access customers that did not.
“The Statement alleges that these higher access prices would act as a strong disincentive against entry into the delivery market, further increasing barriers to expansion for postal operators seeking to compete with Royal Mail in this market, and leading to a potential distortion of competition against the interests of consumers.”
The Statement of Objections sets out Ofcom’s provisional view and represents one stage in Ofcom’s investigation. It is not a definitive decision that there has been a breach of competition law by the post. Royal Mail said that it was disappointed by Ofcom’s announcement and would be carefully considering the provisional findings before submitting a robust defense.
July 29, 2015