Royal Mail fined second time -- now for acting tough with competition

Royal Mail fined second time -- now for acting tough with competition

	Published : Sun, 19 Feb 2006 02:10 By : Phil Bateman Print this Story

LONDON: Royal Mail got fined for the second time in a week Friday when regulator Postcomm levied a 2.16-million-pound penalty on it saying the company is not opening up to competition quickly.

Royal Mail is duty-bound to allow access to its new competitors to the "last mile" delivery market, where it retains it dominance after the postal market was opened up for private enterprises, Postcomm said. The regulator has complaints from three of its competitors -- Express Ltd, TNT Mail UK and UK Mail.

The regulator said Royal Mail may have benefited by sharing with its commercial division information about new mail operators, which are charged a fee by Royal Mail for using its postmen to deliver their mail.

"Many companies working for different clients have ‘Chinese walls' -- internal separation arrangements that prevent conflicts of interest and the exchange of confidential information between teams working on different projects.

"The Commission is surprised that Royal Mail did not think it needed to do this in a fully professional manner," Postcomm said.

The regulator had earlier fined Royal Mail 11.7 million pounds for late deliveries and postal articles lost.

Nigel Stapleton, Postcomm's chairman, said the regulator has to enforce the rules for a postal market where, in the interests of customers, there is effective competition. "We cannot allow any actions by Royal Mail that unfairly keep competitors out of the market."

Royal Mail has a 97 per cent share of the postal market. It hit out at the regulator with chairman Allan Leighton describing the levy as a "shoddy report from a grandstanding regulator looking to micro-manage the entire postal industry". He said the report is full of unsubstantiated and subjective views, which are not based on facts.

Leighton said Royal Mail charges fees to competitors for delivering their post using its postmen as part of deals entered into freely. He added: "This is almost Pythonesque. By Postcomm's line of thinking, I have absolutely no doubt that later this year the regulator will fine us for delivering the best quality of service ever, due to the fact that they decide it's anti-competitive."

He said Royal Mail will legally contest the penalty. Royal Mail has 28 days to make representations about the fine.