Out-Law News

Royal Mail sets aside £18 million over French anti-trust probe

Royal Mail plc said it has set aside a total of £18 million after reaching a settlement agreement with the French competition authority over an alleged breach of anti-trust laws by its parcel delivery subsidiary General Logistics Systems (GLS) France.

UK-based Royal Mail said on 9 October that “whilst a settlement has been agreed in principle”, the French regulator (Autorité de la Concurrence) is continuing its investigation.

By agreeing to settle and provide compliance commitments now, Royal Mail said it “will benefit from a reduction to any fine”. 

Royal Mail, which listed on the UK stock market one year ago, said last July that it had received a notice from the French regulator that GLS may have breached competition laws during the period before the end of 2010.

According to Royal Mail, the allegations against GLS were “in connection with a broader investigation into alleged activities within the industry in France”.

“The amount of any fine is not expected to be determined until the second half of the 2015-16 financial year,” Royal Mail said. The financial provision it has made for the half-year ended 28 September 2014 comprises £12 million “in respect of the current estimate of any fine and £6 million in respect of estimated legal costs associated with the investigation and the costs of the compliance commitments”.

According to logistics analysis firm SCLI, Royal Mail entered the European parcel sector in 1999 through the acquisition of German Parcel via GLS. SCLI said that for the financial year ended 31 March 2013, GLS reported revenue of nearly £1.5 billion.

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