Anti-Competition Investigation Launched By Ofcom Into UK Parcel Delivery Sector

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    Photo by Paul Evans via Flickr

    Ofcom, the Communications regulator, has launched an investigation into suspected cartel activity in the business parcel delivery sector.

    The UK watchdog said that it was investigating suspected customer allocation and market sharing deals in the industry, which would likely result in “prevention, restriction or distortion of competition in the UK and/or the European Union.”

    A spokesperson for Ofcom did not give details of the activities or companies that the regulator was examining. The spokesperson only disclosed that the investigation will authenticate whether the competition rules had been breached. He also said that it was at an early stage.

    It is understood that the said investigation does not cover the whole sector and only a “limited number of parties” who are working in the industry are being investigated.

    The regulator said that once it determines that there is already “sufficient evidence of one or more breaches” the office will issue a “statement of objections” which will identify the affected parcel delivery firms.

    The said investigation was started last week. However, the regulator waited until Monday to disclosed that it was looking into the sector.

    Last week, Royal Mail was imposed with £50 million fine by Ofcom for violating competition law by trying to force Whistl, one of its rivals, to pay higher prices.

    The fine was considered the largest ever imposed by the watchdog and relates to Royal Mail increasing the price it charged its competitors for its delivery services by 0.25p per letter.

    Ofcom said that the price increase was imposed approximately four years ago and affected “bulk mail” such as utility bills. It says that it was part of a “deliberate strategy to limit competition” as other firms in the sector depended on the former state monopoly for thier deliveries on some less profitable routes.

    Royal Mail has declared that it has plans to file an appeal against the penalty.