ROYAL Mail was slapped with a £50 million fine today for committing a “serious breach” of competition law.
Communications regulator Ofcom found that the company had abused its dominant position by discriminating against Whistl, its only major competitor for delivering letters.
The penalty follows an investigation into a complaint by Whistl, one of Royal Mail's wholesale customers, into changes that the former public service made to its wholesale customers’ contracts in 2014.
Under the new contracts, Royal Mail imposed price increases on wholesale customers such as Whistl that sought to compete with it by delivering letters in some parts of the country.
The higher prices were introduced in those remaining areas where Whistl used Royal Mail for delivery.
Following notification of these new prices, Whistl suspended plans to extend its delivery services to new parts of Britain.
The Ofcom investigation found that Royal Mail’s actions amounted to “anti-competitive discrimination against customers, such as Whistl, who sought to deliver bulk mail” and a “serious breach” of section 18 of the Competition Act.
Royal Mail vowed to appeal against Ofcom’s decision, claiming that its price changes were “never implemented or paid.”
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