Competition Appeal Tribunal upholds £50 million fine on Royal Mail

In a hearing today, The Competition Appeal Tribunal upheld the £50 million fine imposed by Ofcom on Royal Mail on 14 August 2018.

The penalty, the largest ever imposed by Ofcom, is the result of an investigation into a complaint, made to Ofcom by Whistl. The complaint was about changes Royal Mail made to its wholesale customers’ contracts in early 2014, including wholesale price increases it was introducing.

At the time, Whistl was expanding its business to compete directly with Royal Mail by delivering business letters (known as ‘bulk mail’) to addresses in certain parts of the UK – becoming the first company to challenge Royal Mail’s monopoly in the large-scale delivery of bulk mail.

The 2014 wholesale price increases meant that any of Royal Mail’s wholesale customers seeking to compete with it by delivering letters in some parts of the country, as Whistl was, would have to pay higher prices in the remaining areas – where it used Royal Mail for delivery.

Royal Mail have released a  statement saying they were “disappointed” by today’s judgement: “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.”