Postcomm, the UK independent regulator for postal services, has launched an investigation into the way Royal Mail prices access and retail packets services for business users. The investigation was originally instigated following two complaints from the Mail Competition Forum and TNT Post Group, submitted in January and May 2008, which alleged that margin squeeze was occurring for some 2nd class packets services.  

The investigation will examine the margin allowed between the retail and access prices between 0-2kgs, in particular whether it is sufficient for other operators to be able to access Royal Mail’s wholesale network profitably, and whether other operators are able to compete in the retail market. It will also look at the allegedly unfair differential pricing structures which exist between some Royal Mail retail and wholesale packets services.  

If proven, the allegations could potentially contravene Conditions 10 and 11 of Royal Mail’s Licence which prevent Royal Mail from gaining any unfair commercial advantage from access arrangements, and which forbid undue preference or undue discrimination in a market where there is no effective competition.