Royal Mail broke competition law that saw customers paying higher prices

The Royal Mail Group has admitted a breach of competition law that led to an investigation by the industry watchdog, Ofcom.

The delivery company accepted “being part of an illegal anti-competitive agreement” over a period of more than four years with SaleGroup, which is a re-seller of the Royal Mail’s business parcel delivery service.

The arrangement left customers paying higher prices, while the company informed the Competition and Markets Authority (CMA) last year that it had an agreement between its Parcelforce division and the firm to ensure that they did not offer their services to each other’s customers.

SaleGroup, which was trading as Despatch Bay, entered an agreement with Parcelforce Worldwide in which they shared customer data to avoid approaching each other’s customers, according to Ofcom.

Royal Mail informed Ofcom of this situation, after which the regulator found that the agreement had broken the law by restricting competition through sharing customers.

The regulator gathered correspondence from more than 90 customers and subsequently found that the two companies engaged in an agreement to share customers for almost five years from 2013 – 2018.

Gaucho Rasmussen, Ofcom’s director of investigations and enforcement, said: “Anti-competitive agreements like the one between Royal Mail and the SaleGroup are designed to restrict competition, and they often lead to customers paying higher prices as a result.

“This kind of behaviour is a serious breach of competition law and unacceptable.”

SaleGroup was fined £40,000 by Ofcom, while the Royal Mail was granted immunity from any fine as the company came forward with the information.