Earlier this month, U.K. communications regulator Ofcom found Royal Mail to be in breach of Section 18 of the Competition Act following a complaint made by mail competitor and Royal Mail wholesale customer Whistl. Ofcom subsequently handed out a record penalty of £50 million (U.S. $64.3 million), which the parcel delivery firm has appealed based on claims that it complied with all competition and other regulatory laws.
The investigation into Royal Mail began in 2014 at the instigation of Whistl, because of changes that were announced to contracts for wholesale customers. In 2012, Whistl had announced that it wanted to “roll out end-to-end letters delivery (collecting, processing, and delivering business mail three days a week without using Royal Mail’s network) to about 42 percent of U.K. addresses,” according to Royal Mail’s response to Ofcom’s finding. “It would do so by serving urban areas covering just 8.5 percent of the U.K.’s land mass.” Whistl’s expansion covered delivering business letters, known as “bulk mail,” and would have made it the first company to challenge Royal Mail’s monopoly in the large-scale delivery of bulk mail.
