The regulator published a consultation document examining Royal Mail's special privileges that include VAT exemption, parking privileges for post vans and faster customs clearance for overseas mail, to see whether they distorted the market.
Although the regulator can not make any changes to Royal Mail itself, it said that if a change were needed it would "make recommendations to the appropriate government department or authority".
Postcomm claims that while Royal Mail's perks have little effect on businesses that can reclaim VAT, many major mailers such as providers of financial services or charities are not able to reclaim VAT. It claims that this puts competitors at a disadvantage and that it should be reviewed immediately to "level the playing field".
Private operator Deutsche Post said yesterday: "This is good news for us because Royal Mail's VAT-exempt status has prevented us competing directly with it."
A spokesperson from Royal Mail said: "The last thing that we want is for our customers to face any price rises due to the introduction of VAT."
Private operators competing with Royal Mail's 500-year monopoly include UK Mail, TPG and Hays.
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