Royal Mail Competition Probe Dropped

24 November 2003

Britain's mail watchdog has rejected claims from six direct marketers that postal giant Royal Mail acts anti-competitively.

The former state-owned monopoly was accused of abusing its dominance in the delivery market to benefit Mailsort, its discount service for high-volume mailers who sort their own post. Regulator Postcom investigated the complaint, but has decided not to take the matter any further due to lack of evidence.

The allegations were made through consumer watchdog Postwatch earlier this year [WAMN: 20-Mar-03]. The direct marketers involved have not been named for fear of harming their relations with Royal Mail, but according to Postwatch they include "major household names".

Initially the complaint was filed with the Office of Fair Trading, since many direct marketers believe Postcom is too close to the mail giant. However, the OFT decided not to proceed and transferred the case to the postal regulator.

The decision not to continue the investigation was greeted with dismay -- but not surprise -- by some in the industry. "The reality," complained Chris Gordon, chairman/ceo of direct marketing agency WWAV Rapp Collins, "is that, despite past assurances, the current regulatory structure clearly provides inadequate protection against potential anti-competitive behaviour."

He continued: "Unfortunately this area of regulation comes way down Postcom's list of priorities, rendering a proactive and coordinated approach to the prevention of market abuse unfeasible."

Data sourced from: BrandRepublic (UK); additional content by WARC staff