Update on Ofcom’s Statement of Objections to Royal Mail

Reports in the UK media today (29 July) have speculated that “Ofcom could fine Royal Mail £1bn over its pricing”. The Independent newspaper, for example, lead a story today (29 July) with the sentence: “Royal Mail could be fined almost £1bn after the postal regulator found that it broke competition law and prevented rivals from expanding.”

However, an Ofcom spokesperson emphasised to Post&Parcel this morning that the Statement of Objections which it issued to Royal Mail yesterday (28 July) represented a provisional view (as the Independent concedes later in its article).

If the provisional findings are confirmed in the final decision and if a fine is considered an appropriate measure, a fine of up to 10% of the company’s annual revenue could be imposed (which would be £940m in Royal Mail’s case). The Ofcom spokesperson said that it was, therefore, “a bit of a stretch” to be talking about a £1bn fine now.

As previously reported, Ofcom’s Statement of Objections set out its “provisional view” that Royal Mail “breached competition law by engaging in conduct that amounted to unlawful discrimination against postal operators competing with Royal Mail in delivery”. Royal Mail said that it is “considering carefully Ofcom’s provisional findings” and “will submit a robust defence to Ofcom in due course”.