Competition Act investigation regarding business parcel delivery services

14 November 2019

Closed

Investigation into Operators in the business parcel delivery sector
Case opened 13 August 2018
Case closed 14 November 2019
Summary

Section 2 of the Competition Act 1998 prohibits agreements between undertakings that have as their object or effect the prevention, restriction or distortion of competition, where this may affect trade within the UK (the ‘Chapter I prohibition’). Similarly, Article 101 of the Treaty on the Functioning of the European Union (‘TFEU’) prohibits agreements between undertakings that have as their object or effect the prevention, restriction or distortion of competition, where this may affect trade between Member States.

This investigation will examine suspected market sharing and/or customer allocation arrangements between operators in the business parcel delivery sector in the UK and/or European Union and establish whether there has been one or more infringements of the Chapter I prohibition and/or Article 101 of the TFEU.

Relevant legal provision(s)

Section 2 of the Competition Act 1998 (the “Act”) and Article 101 of the Treaty on the Functioning of the European Union (“TFEU”).

Ofcom has issued an infringement decision to Royal Mail Group Limited (“Royal Mail”) and The Salegroup Limited (“TSG”) confirming that they have breached UK and EU competition law.

Ofcom has found that Royal Mail and TSG agreed not to offer or supply parcel delivery services to each other’s customers, who were mainly small and medium businesses. Both parties proactively implemented, monitored and enforced this agreement between at least August 2013 and May 2018.

We have concluded that this agreement breached competition law because its object was to restrict competition through the sharing of customers in the relevant market. The agreement between Royal Mail and TSG prevented some customers from being able to purchase parcel delivery services from their chosen provider and, in some cases, led to them paying higher prices.

Ofcom has confirmed its decision to impose a financial penalty of £40,000 on TSG (following TSG’s agreement to settle the case). Royal Mail has been granted immunity under the CMA’s leniency policy and, given its cooperation during Ofcom’s investigation, has not been fined.

Ofcom will make available a public version of the infringement decision as soon as possible.


Case leader

Sheryl Willson (sheryl.willson@ofcom.org.uk)

Case reference CW/01222/07/18