The European Commission has launched an in-depth investigation to determine whether the UK’s funding of Royal Mail violates EC Treaty State aid rules, following complaints from Royal Mail competitors. Royal Mail held a legal monopoly over basic postal services until 2005 and remains the UK’s leading postal services provider in the liberalised market. The Commission’s inquiry targets three loans provided to Royal Mail by the UK totalling nearly EUR 2.7 billion, and an escrow account of EUR 1.2 billion – none of which were notified to the Commission. The Commission will determine whether the funds were provided on terms acceptable to a private investor in a market economy, and so do not constitute State aid, or whether the funds constitute an illegal subsidy. Interested parties will have the opportunity to comment.
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