EU regulators are to investigate how Britain funds the Royal Mail, to check if the government is giving it more money than necessary.
The European Commission said the investigation was triggered by complaints from Royal Mail’s rivals that the company received unfair state subsidies.
Royal Mail lost its legal monopoly over delivering letters at the end of 2005.
“The Commission will be examining the terms of each of the funding measures to determine whether they constitute state subsidies, or whether they meet ’market investor’ conditions,” it said.
EU governments are only allowed to give public service companies exactly what they need to operate services such as broadcasting or transport.
If regulators find the Royal Mail was given extra money, it may be ordered to pay that back.