Accused of anti-competitive behaviour

Royal Mail owner faces £878m claim for abusing dominance

The proposed claim is for damages resulting from Royal Mail’s breach of competition law

Royal Mail owner International Distribution Services has been served with an £878m collective action claim relating to its anti-competitive behaviour in the bulk mail market.

The claim has been filed on behalf of Bulk Mail Claim Ltd (BMCL), which represents an estimated 290,000 class members who were overcharged as a result of Royal Mail’s behaviour.

The proposed claim is for damages resulting from Royal Mail’s breach of competition law. It is brought on behalf of those who purchased or paid for relevant bulk mail services at any time after 10 January 2014.

The proposed claim alleges that Royal Mail’s anti-competitive behaviour had the effect of cutting off competition for bulk mail delivery services from 2014 onwards, with the result that senders of bulk mail were overcharged throughout this period. The proposed claim seeks to achieve compensation for this overcharge.

Robin Aaronson of BMCL, the proposed class representative, said: “Where there has been an abuse of dominant position, as has occurred in this case, it is important that those suffering loss are able to obtain redress.

“A collective claim is the only fair and efficient form of redress in this case, given that there are hundreds of thousands of affected customers and it would be commercially unviable for them to bring individual proceedings.”

Andrew Wanambwa, partner in the dispute resolution team at law firm Lewis Silkin, also commented: “Royal Mail abused its dominant position, resulting in hundreds of thousands of bulk mail customers being overcharged. The purpose of this claim is to hold Royal Mail accountable for its actions and secure compensation for affected customers.”

A case management hearing to determine next steps in the claim will be held by the Competition Appeal Tribunal.

Bulk mail – typically sent by organisations such as NHS trusts, retailers, charities, local authorities, banks, utility companies, advertisers, and publishers – includes bills, council tax statements, bank statements, utility company bills, charity fundraising appeals, advertising mail, and some magazine subscriptions.

The Guardian has reported that Royal Mail responded: “We confirm that we have received an application for a collective proceedings order from an entity called Bulk Mail Claim Ltd which we consider to be without merit and we will defend it robustly.”

Reacting to the news, Central Mailing Services (CMS) managing director Mitesh Chouhan told Printweek: “Royal Mail look for faults with DSA [downstream access] traffic by charging reversion fees at any opportunity they can! It’s income for them, they should actually treat the DSA volumes as client spend.”

GB Mail managing director Joseph Ghadami described the situation as “all very messy”.

“All sorts of are people involved in it, including some DSAs, but I personally try to steer clear of all the negativity – [there's] not much RM does for us as a mailing house anymore since they disbanded their mailing house support team. One thing they do always seem to get right is their Direct Debit collection, that’s about the only thing that’s on time with them!”

“Lack of internal communication and direction is what is causing this – but who can be surprised, most structured 'organisations' get above themselves (look at the Government) then just slowly crumble. It happens as some kind of cycle.”

Anthony Drew, managing director at Blue Print Direct Mail, added: “My first reaction was 'serves them right', for a litany of reasons; management always blaming someone else, terrible service, multiple recent price rises, poor systems. But on reflection I just despair as ultimately we only have one Royal Mail and if they suffer, our clients suffer and that’s not good for trade.

“Am guessing that Mr Křetínský, the successful businessman that he is, would have been aware of this and factored it in.”

Czech billionaire Daniel Křetínský’s firm EP Group is currently attempting to buy IDS in a near-£3.6bn buyout deal.

Separately, Royal Mail has reported that it saved 2,000 tonnes of waste last year by replacing single use cardboard trolley sleeves with more durable, reusable versions which last up to four years.

The new sleeves, which were fully designed and manufactured in-house, cut waste by 10% last year and helped Royal Mail achieve its target of reducing waste by 25% compared to the 2020/21 base year.

Royal Mail’s in-house engineering team was tasked with designing a replacement for the traditional single-use fabric and cardboard trolley inserts used in mail centres and delivery offices, which would be reusable, increase capacity, and more compatible with automated machinery.

Waste management is a key part of Royal Mail’s Steps to Zero strategy, which set a goal of achieving Net-Zero by 2040 with a 50% reduction in Scope 1 and 2 emissions by 2030.