The owner of Royal Mail, International Distribution Services (IDS), is facing an 878 million pound class action lawsuit, accusing the company of abusing its dominant position in the bulk mail market. The legal action has been filed by Bulk Mail Claim Limited, a newly established organization that claims to represent approximately 290,000 affected customers. These customers allege that they were overcharged for bulk mail services due to Royal Mail’s anti-competitive behaviour.
Bulk mail services, which include the delivery of bank statements, energy bills, council tax notices, weekly magazines, and other correspondence, are typically used by businesses, local authorities, utility companies, charities, and publishers. The claimants argue that Royal Mail has engaged in practices that stifled competition, leading to inflated prices for the sorting, collection, and delivery of bulk mail. This conduct, the lawsuit claims, unfairly impacted businesses that relied on these services to send large volumes of mail.
The class action lawsuit seeks compensation for businesses and organizations that purchased Royal Mail’s bulk mail services between 10 January 2014 and at least 7 June 2022. Bulk Mail Claim Limited asserts that the practices employed by Royal Mail resulted in higher costs for customers and deprived them of the benefits of competition. The claimants argue that this anti-competitive behaviour, which was effectively monopolistic, harmed the market by preventing other postal service providers from offering competitive alternatives.
The claims against Royal Mail are not new. In 2018, the UK communications regulator, Ofcom, fined the postal service 50 million pounds for abusing its dominant position in the bulk mail sector. Ofcom’s investigation found that Royal Mail’s actions had hindered competition, ultimately denying consumers the advantages that come with a competitive marketplace. The fine was imposed after the regulator concluded that Royal Mail’s behaviour was both unlawful and detrimental to businesses and consumers alike. Royal Mail’s attempts to appeal the fine were unsuccessful, and it now faces further legal battles as it seeks to defend itself against the ongoing claims.
In addition to the class action, Royal Mail is facing a separate 600 million pound lawsuit brought by Whistl, a competitor in the postal service industry. Whistl, which scaled back its operations in 2015, claims that it was forced to reduce its workforce by 2,000 jobs due to Royal Mail’s anti-competitive conduct. This case is expected to go to trial in the High Court in the coming year, adding further pressure on the beleaguered postal company.
Royal Mail, for its part, has strongly denied the allegations, stating that the class action is without merit. A spokesperson for the company confirmed that it had received the application for a collective proceedings order from Bulk Mail Claim Ltd but emphasized that it would vigorously defend itself against the claims.
The class action has been filed with the UK Competition Appeal Tribunal, which will now consider whether the case will proceed. A hearing has been scheduled for 3 March 2025. The outcome of this legal battle could have significant implications for Royal Mail, as well as for other businesses operating in the UK postal service industry.
