Royal Mail Group Ltd.’s pension aid from the U.K. government is under investigation by European Union regulators.
“We must ensure that the state measures do not provide undue advantages to Royal Mail, as this would distort the conditions of competition among postal operators,” EU Competition Commissioner Joaquin Almunia said in a statement Friday.
The British government plans to take responsibility for London-based Royal Mail’s £8.4 billion ($13.7 billion) pension liability in March 2012, ahead of a sale of the state-owned postal service. EU regulators can block payments that would give one company an unfair advantage over rivals.
Royal Mail may not be making a “sufficient” contribution to its restructuring costs and may not be planning “adequate measures” to compensate for the harm to competition caused by the state subsidy, the Brussels-based European Commission said Friday.
Royal Mail officials declined to comment.