UK Royal Mail faces watchdog complaint of market abuse
Royal Mail has been accused of “abusing its dominant position in the market” for the delivery of letters by its consumer watchdog, which has filed a special complaint to competition authorities.
Postwatch yesterday submitted a “super complaint” to the Office of Fair Trading on behalf of many of Royal Mail’s large customers, saying the mail operator had abused its position by preferring its own mail consolidation business.
Such a complaint, which relates to the operation of a market, allows fast-tracking. The OFT must decide in 90 days whether to investigate.
Royal Mail, whose chairman, Allan Leighton, has been struggling to restructure the loss-making group, said this was the first that it had heard about the complaints. “We must study the full submission and see what the OFT has to say,” it added.
The operator, which is losing more than £1m a day, has been under growing pressure to loosen its hold of the mail market, which was partially open to competition earlier this year.
Postwatch’s complaint is the third to be made under new government rules allowing recognised consumer bodies to complain on behalf of customers. The previous ones were brought by the National Association of Citizens’ Advice Bureaux over doorstep sellers, and the Consumers’ Association over the private dental market.
If the OFT finds Royal Mail has acted in an anti-competitive fashion, it could fine the operator.
Postwatch said it had been receiving complaints from Royal Mail’s larger direct mailing clients for the past 18 months. These companies need to use Royal Mail’s delivery offices to send letters to the UK’s 27m homes, while Royal Mail offers clients discounts for this service. But customers say the contracts allow Royal Mail, which has a natural monopoly over last-mile delivery, to change the terms at a moment’s notice.
* Graham Corbett’s three-year term of office as chairman of Postcomm, the industry regulator, finishes at the end of this month. A parliamentary question is expected on Friday to raise the question of extending his contract with the DTI by 12 months. Industry insiders say Mr Corbett has agreed to stay on.
