Royal Mail marketing reined in after competition ruling

by Daniel Farey-Jones,, Brand Republic 24-Jan-05, 07:00

LONDON – Royal Mail has promised to improve its adherence to and awareness of competition law in its promotions, after an investigation by Postcomm upheld a complaint from AMP that two Royal Mail discount promotions from 2003 were anti-competitive.

Postcomm's investigation concluded that in offering the schemes, Royal Mail contravened two conditions in its licence designed to facilitate competition.

Each scheme gave selected catalogue and advertising customers a discount on posting additional items.

The licence conditions in question are conditions 11 (promotion of effective competition) and 13 (appointment of compliance officer).

Royal Mail has promised Postcomm that new promotions will be subjected to a regulatory and competition law approval process at a senior level, with its compliance officer taking a more proactive stance on approval.

In addition, it promised that it will train all its sales staff on UK and European competition law, as well as the obligations contained within its licence.

Postcomm will monitor the situation to see that Royal Mail complies with its promises, and could enforce financial penalties if there is a repeat offence.

Nigel Stapleton, chairman of Postcomm, said: 'Postcomm is being very watchful that Royal Mail -- which currently has over 99% of the letters market -- is not using its dominance, perhaps unwittingly, to freeze out competitors."

Postcomm last week opened a separate investigation into Royal Mail's offer of zonal prices for access.

The schemes investigated by Postcomm were the Catalogue Customer Reactivation and Acquisition Test and the Mailsort 3 1400 Incremental Advertising Promotion.

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