Postcomm, the postal services regulator, found that Royal Mail failed to take adequate steps to ensure it did not gain an unfair commercial advantage over its competitors in the "access to last mile" market.
Postcomm chairman Nigel Stapleton said: "We cannot allow any actions by Royal Mail that unfairly keep competitors out of the market."
The mail sector was opened to full competition in January. Currently, new operators pre-sort post before taking it to Royal Mail for the last leg of delivery.
Postcomm concluded that Royal Mail has failed to put adequate safeguards in place to ensure that its delivery operation will not share sensitive commercial information about other operators with its own sales teams.
"Competition is already starting to offer a better deal for customers but, given Royal Mail's dominant position, the full benefits will never be felt unless the playing field is made as level as possible," said Stapleton.
Royal Mail denounced the decision in a statement, claiming that neither customers nor competitors have been disadvantaged.
"This is a shoddy report from a grandstanding regulator who is looking to micro-manage the entire postal industry," said Royal Mail chairman Allan Leighton. "Royal Mail has made no gain from the way in which we operate access services - so why any fine at all? This huge and arbitrary penalty is illogical."
Postcomm declined to comment on Royal Mail's statement.
Royal Mail has 28 days to make representations to Postcomm to have the enforcement order for the fine overturned.
Royal Mail currently enjoys a 97 per cent share of the postal market and has charged competitors fees for using its postmen and postwomen to deliver mail.
Postcomm began investigating Royal Mail's downstream access arrangements when it received complaints last year from three of its competitors - Express Ltd, TNT Mail UK and UK Mail Ltd - which were disgruntled with various aspects of Royal Mail's behaviour.
The move comes just weeks after Postcomm fined Royal Mail £11.38m for failing to protect the security of the post.
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