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Royal Mail loses appeal over £50m Ofcom fine

The communications watchdog slapped Royal Mail with the fine in August last year after it said the company ‘abused its position’.

Ofcom investigated Royal Mail’s behaviour after complaints by Whistl (Steve Parsons/PA)
Ofcom investigated Royal Mail’s behaviour after complaints by Whistl (Steve Parsons/PA)

By Henry Saker-Clark, PA City Reporter

Royal Mail’s appeal against a £50 million fine it was handed by Ofcom for breaching competition law has been rejected, the Competition Appeal Tribunal has announced.

The communications watchdog slapped Royal Mail with the fine in August last year after it said the delivery firm “abused its position” by “discriminating” against its largest competitor for delivering letters.

The tribunal has now upheld the fine which related to its actions in 2014 when rival Whistl, which had been known as TNT, aimed to be its first major mail delivery competitor in the UK.

Ofcom investigated Royal Mail’s behaviour after complaints by Whistl that is used its dominant position to “discriminate” against the fast-growing rival.

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 Ofcom spokesman

Royal Mail challenged the fine it was subsequently handed, but the Tribunal has now dismissed Royal Mail’s appeal arguments.

In a statement to the London stock exchange, Royal Mail said it is “carefully studying” the judgment and is “disappointed” by the decision to uphold the Ofcom fine.

It added: “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.”

An Ofcom spokesman 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.”

Investigations by the communications regulator revealed that wholesale customers which wanted to compete, such as Whistl, would have to pay higher prices in remaining areas where it used Royal Mail for delivery.

At the time, Royal Mail said it raised prices to protect the Universal Service, which means postage is charged at the same rate wherever it comes from in the UK.

The announcement came amid a separate High Court challenge by Royal Mail in order to stop a pre-Christmas strike by postal workers.

PA

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