Royal Mail warned price hikes breach competition law
Royal Mail has been slapped across the wrist by communications regulator Ofcom for a series of abortive price hikes for bulk mail delivery customers, now deemed to be in breach of competition law.
First announced in January 2014, the plans were subsequently withdrawn following protests from rival delivery services such as Whistl, which claimed the move was uncompetitive as they would see customers using third party services charged more.
Much bulk mail is currently collected by private postal firms direct from businesses before being passed to the Royal Mail for sorting and delivery.
In its 'provisional view' Ofcom declared: “Changes to Royal Mail's wholesale prices for bulk mail delivery services contained a differential in pricing which meant that, in practice, higher access prices would be charged to... customers that competed with Royal Mail in delivery than to those access customers that did not.”
Ofcom added that it believed this stance served only to act as a disincentive for providers such as Whistl to establish rival ventures in the delivery sector.
For its part Royal Mail has promised to consider the regulators findings and issue a ‘robust defence’ after reiterating that it believed its pricing proposals were ‘fully compliant with competition law’.
These representations will be fully considered by Ofcom before it makes its final decision.