Postcomm ruling triggers Royal Mail pricing rethink
Royal Mail has been forced to overhaul its pricing strategy following a Postcomm investigation into anti-competitive practices.
The Postcomm probe, launched over a year ago (PM December 5, 2003), followed a complaint from a rival company that Royal Mail was offering unfair discounts to secure business. Postcomm concluded that two schemes – the catalogue customer reactivation and acquisition test, and the Mailsort 3 incremental ad promotion – were anti-competitive.
Royal Mail has agreed to tighten up its internal compliance procedures as a result.
Postcomm chairman Nigel Stapleton says: “We are being very watchful that Royal Mail is not using its dominance to freeze out competitors. We have extensive powers to deal with anti-competitive behaviour, which we will not hesitate to use.
“We will continue to investigate complaints from competitors who feel their business is being threatened by unfair Royal Mail actions.”
In a separate move, Royal Mail has also bowed to pressure over its bulk mail compensation scheme by extending the 21-day time-limit – by three days – to allow for ‘administration and technical problems’.
The postal operator came under fire last year (PM September 17) for not “honouring the spirit of the scheme”, as regulator Postwatch accused it of exploiting a loophole to halt payouts.
Some 600 business customers are now eligible for compensation following Royal Mail’s failure to hit eight out of its nine bulk mail distribution targets in 2003-4. The compensation has been slow to emerge, with some estimates placing the initial figure owed at around GBP85m. Of this, GBP35m remains unpaid.
