Ofcom settles parcel delivery case

Ofcom settles parcel delivery case

Ofcom has announced that Royal Mail and a reseller of its parcel delivery services have admitted their participation in an unlawful customer allocation agreement.

In September 2018 Ofcom issued a statement of objections alleging that Royal Mail and SalesGroup (trading as Desptach Bay) a reseller of its business parcel delivery services have breached the chapter I prohibition and Article 101 TFEU.

In May 2018 Royal Mail reported the arrangement to the Competition and Markets Authority who transferred the case to Ofcom as concurrent competition regulator for the postal sector. 

Ofcom states that the arrangements concerned at least 90 customers between 2013 and 2018 where the companies monitored and operated a customer sharing arrangement affecting both indirect and direct customers. Ofcom found that there was regular email correspondence between the parties which typically led to one of them withdrawing a lower price that they had offered to a customer.

The SaleGroup also shared its customer list with Royal Mail’s ParcelForce.

Royal Mail received immunity from fines under the CMA’s leniency policy.  SalesGroup was fined £40,000 which Ofcom regards as significant in view of the company’s small size.