UK: Royal Mail to appeal Ofcom fine

Royal Mail Group said on Tuesday, August 14, it will appeal Ofcom’s decision to impose a £50 million (US$63.6 million) fine for breaching competition law.

The communications regulator claims the postal operator abused its dominant position in the market by discriminating against its only major competitor delivering letters.

Ofcom fined the company after investigating a complaint by Whistl, one of Royal Mail’s wholesale customers. The complaint was related to changes, including price increases, made to certain wholesale contracts in early 2014.

At the time, Whistl was expanding its business to compete directly with Royal Mail by delivering business letters to addresses in new parts of the UK.

But Ofcom stated that Royal Mail started charging higher prices in the areas where wholesale customers used it for delivery, meaning Whistl had to suspend its plans.

In a statement, the company announced that it was “very disappointed” by Ofcom’s decision and “strongly refutes any suggestion that it has acted in breach of the Competition Act, and considers that the decision is without merit and fundamentally flawed.”

Full Content: Global Competition Review