Royal Mail is facing action from the postal regulator after a complaint from DX, one of its rivals, that it had breached pricing regulations.

Postcomm is due to make a formal ruling in the next few weeks, but the regulator has already outlined concerns over a new service that operates in DX’s area.

As the dominant incumbent, Royal Mail is not allowed to lower its prices selectively because that impedes emerging competition. Instead, if it lowers prices it has to offer those prices to everyone. DX argued that it had circumvented this by creating a new service and arguing that this served a niche market, rather than a broad one.

A spokesman for DX said: “DX remains very concerned about anti-competitive behaviour by Royal Mail and urges Postcomm to act decisively to meet their statutory duty to promote competition.”

Last year Royal Mail was fined £1 million by Postcomm for failing to ensure that it did not gain an unfair commercial advantage over its competitors in the “access to the last mile” market.

The move came after complaints from three of Royal Mail’s competitors at the time – Express, the dairies business, TNT and UK Mail – who said that they had been hampered in getting uniformly priced access to the final-mile delivery, which is carried out by Royal Mail postmen.

Two years ago the regulator found that Royal Mail’s advertising had breached competition regulations.

A spokesman for Royal Mail said of a potential censure from the regulator: “Royal Mail is operating in a fully competitive postal market and, in developing new products to meet the needs of our customers, Royal Mail’s approach is to ensure that we have fair, cost-reflective prices.”

Potential action from the regulator, which could involve a big fine, looms as Royal Mail faces another national strike this week in a pay dispute. The second walkout in an increasingly bitter dispute will begin on Thursday evening and will last for 24 hours. The timing is aimed to create maximum disruption in the run-up to the weekend.

The Communication Workers Union has asked Allan Leighton, Royal Mail’s chairman, to come to talks before the next walkout, but the union emphasised that new negotiations would be possible only if the postal group made a fresh pay offer. The existing 2.5 per cent increase was rejected by 77 per cent of CWU members in the strike ballot.

So far Royal Mail has said that it cannot afford to increase the offer. Talks at the conciliation service Acas have also failed to resolve the dispute. It is also likely that the CWU will set further strike dates tomorrow when the union’s ruling executive meets.

The last national postal strike 11 years ago stretched over several months.

Postal workers will demonstrate tomorrow outside the European Parliament in Strasbourg as it votes on Europe-wide proposals to remove all protections from incumbent postal operators and deregulate the market. European unions fear that full deregulation would lead to job losses and poorer postal services.

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