Royal Mail faces ?600m legal battle over anti-competitive behaviour

Royal Mail faces a huge settlement as Whistl takes its case to the High Court.

Royal Mail and logistics company Whistl are preparing for a High Court  battle, after the latter accused the postal service of anti-competitive behaviour, which it claims resulted in over 2,000 job losses at the firm.

The claim from Whistl, which is for upward of £600m in damages, comes in the wake of Royal Mail being fined a record £50m by regulator Ofcom over the same affair.

In the upheld complaint, the postal service was judged to have used its monopoly position to target Whistl with price hikes in 2014 when the claimant, then called TNT UK, was looking to challenge Royal Mail’s position as the UK’s dominant postal company.

At that time, Whistl was preparing to launch its own independent postal service that would facilitate deliveries from businesses to households. The service, which was going to use its own postal workers to make deliveries entirely independent of Royal Mail, was set to cover 42 per cent of British homes. Whistl then would have paid Royal Mail to deliver to the remaining 58 per cent.

But in the run-up to the launch of the new service, Royal Mail raised the cost of making deliveries on behalf of third parties, such as Whistl, in an attempt to hamper the prospects of the new service, the regulator found.

This led to the service, which at the time was Royal Mail’s only door-to-door letter delivery rival, becoming economically unviable, Whistl claimed. Thereafter the company made 2,000 job cuts and discontinued the ‘final-mile’ delivery service.

Whistl chair Nick Wells alleged in a statement that the behaviour was “symptomatic of a historical culture within the organisation, which has been prepared to deliberately abuse its dominant position”.

The claim will add to the already-full in-tray that Martin Siedenberg, the new chief of Royal Mail’s parent company International Distribution Services, is having to manage. Siedenberg has spent much of his first months in charge enmeshed in protracted industrial disputes.

The Royal Mail did not immediately respond to a request for comment but said of the claim in its annual report: “Royal Mail believes Whistl’s claim is without merit and will defend it robustly.”

By Ali Lyon