Commission: Postal Service ‘Discriminated’ Against GameFly20 Apr, 2011 By: Erik Gruenwedel
The U.S. Postal Regulatory Commission April 20 ruled the U.S. Postal Service has applied a double standard when it comes to handling disc mailers from GameFly compared with Netflix and Blockbuster.
In 2009, GameFly, a Los Angeles-based online video game rental service, alleged it was being charged more for non-machine (hand) handling of its disc mailers than were Netflix and Blockbuster.
In a recent filing, GameFly said the unfair treatment was costing it $730,000 in additional postage fees each month.
In its report, the commission concluded the Postal Service had “unduly discriminated” against GameFly — a business it said is similarly “situated” to Netflix and Blockbuster.
Netflix is the Postal Service’s largest individual customer.
“Netflix and Blockbuster have been given a number of preferences, including various forms of manual processing coupled with the avoidance of the non-machinable surcharge,” read the report. “The Postal Service has failed to present adequate and legitimate justifications for these preferences.”
The commission ordered the Postal Service to establish “parallel” rate categories for first-class round trip mailers. One category would include discs sent as presorted first-class mail letters to subscribers and not subjected to the non-machinable surcharge when returned. The other rate category provides that discs mailed round-trip as first-class flats will not be subject to an additional ounce charge.
The Postal Service has 60 days to implement the changes.