28 May 2020

Lost in the post: where is the as-efficient competitor test after Royal Mail v Ofcom?

After the Intel judgment, is passing the as-efficient competitor test (AECT) sufficient to establish the absence of an exclusionary pricing abuse? This was a critical question put before the UK Competition Appeal Tribunal (CAT) by Royal Mail, a near monopoly supplier of “final mile” delivery services for bulk mail, appealing a decision that its wholesale delivery terms were exclusionary.

The CAT’s answer was an emphatic no. It found that the AECT is not required as a matter of law. It also claimed that there were no compelling reasons of economic principle that mandated the use of the test, and said that the test is of very limited or no use as a guide to compliance.

This Brief discusses substantive aspects of the case and their relevance for wider consideration of the applicability of the AECT.

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