FOLLOW US

In a high-stakes legal battle, the owner of Royal Mail must now confront an £878.5 million ($1.1 billion) class action lawsuit brought on behalf of 290,000 retail businesses. The Competition Appeal Tribunal (CAT) has ruled that the case, alleging Royal Mail abused its dominant market position to overcharge bulk mail customers, can proceed to trial.

The lawsuit, spearheaded by Bulk Mail Ltd., represents businesses, charities, and local authorities that claim they were financially harmed by Royal Mail’s anticompetitive conduct.

A Monopoly Under Fire

According to Andrew Wanambwa of Lewis Silkin LLP, who represents Bulk Mail, “Royal Mail’s abuse of its market dominance resulted in excessive charges for bulk mail services, impacting thousands of small businesses and public sector organizations.”

Royal Mail, however, is standing firm. A company spokesperson dismissed the allegations, stating, “Royal Mail believes Bulk Mail Claim Ltd.'s claim is without merit, and we will defend it robustly.”

The Battle for Class Certification

On Monday, Paul Harris KC of Monckton Chambers, arguing for Bulk Mail, pressed the tribunal to grant a collective proceedings order. He emphasized that the claim has a “reasonable, plausible, and credible prospect” of proving that Royal Mail’s restrictions on competition led to inflated prices for bulk mail services.

The class action follows a damning 2018 ruling by Ofcom, the UK’s communications regulator, which found Royal Mail guilty of using its market power to sideline Whistl UK Ltd., its only major competitor in the bulk mail sector. Ofcom determined that Royal Mail’s actions undermined competition, harming businesses that relied on large-scale mail distribution for their operations.

Who’s Affected?

Bulk Mail Ltd. is acting on behalf of businesses and organizations that purchased bulk mail services between January 2014 and June 2022. Notably, 94.7% of those affected are small and midsized enterprises, many of which depend on affordable mail services to reach their customers.

The tribunal proceedings are expected to focus on the extent to which Royal Mail is bound by Ofcom’s findings, a key point of contention in the case.

A Pattern of Legal Challenges

This lawsuit isn’t Royal Mail’s first legal headache related to anticompetitive behavior. In February, the postal giant quietly settled a £600 million claim brought by Whistl, which had accused Royal Mail of similar market manipulation. The terms of that settlement remain undisclosed.