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Ruling Confirms Postal Service Discriminated Against GameFly 152

Posted by Soulskill
from the stamping-out-unfairness dept.
An anonymous reader writes "It took almost two years, but the US Postal Regulatory Commission just ruled (PDF) that the US Postal Service '...had unduly discriminated against GameFly.' GameFly recently complained that the additional postage was costing them $730,000 per month."
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Ruling Confirms Postal Service Discriminated Against GameFly

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  • Re:GameFly? (Score:5, Informative)

    by dingfelder (819778) on Thursday April 21, 2011 @03:29AM (#35890394) Homepage Journal

    good questions.

    FTA, Gamefly, the popular video game rental service that operates through the mail, has filed a complaint with the Postal Regulatory Commission about the high number of games that are lost or stolen in the mail.

    The complaint (PDF) asserts that the postal service's automated sorting machines have a tendency to break a small percentage of discs, and that preferential treatment is given to DVD rental services like Netflix and Blockbuster.

    "According to Gamefly's numbers, it mails out 590,000 games and receives 510,000 games back from subscribers a month. The company sees, depending on the mailer, between one and two percent of its games broken in transit. ... Even if you assume the number is one percent, and a game costs $50 to replace, that's an astounding $295,000 a month in lost merchandise. ... That's not the only issue — games are also stolen in transit, which has lead to the arrest of 19 Postal Service employees."

    It took almost 2 years, but the US Postal Regulatory Commission just ruled that the US Postal Service "...had unduly discriminated against Gamefly." Gamefly recently complained that the additional postage was costing them $730,000 per month.

    From the Order on Complaint filed today by the PRC (the full report is interesting reading, if you're into that sort of thing):

            In this latter section, the Commission confirms evidentiary rulings made by the Presiding Officer; finds that GameFly is similarly situated to Netflix and Blockbuster; concludes that Netflix and Blockbuster have been given a number of preferences, including various forms of manual processing coupled with the avoidance of the non-machinable1 Complaint of GameFly, Inc., April 23, 2009 (Complaint).Docket No. 2009-1 Executive Summarysurcharge; and determines that the Postal Service has failed to present adequate and legitimate justifications for these preferences.

            [1004] DVDs returned by subscribers to Netflix in its prepaid letter-sized mailers are non-machinable, and are frequently damaged or cause machine jams. DVDs returned by subscribers to GameFly also are damaged from processing on automated letter processing equipment. The Postal Service separates and hand processes a substantial proportion of Netflix’s returns without imposing a non-machinable surcharge. The Postal Service is unwilling to hand process GameFly’s returns causing GameFly to incur an additional ounce charge on its mail, which the Postal Service refuses to waive.

            [1005] To remedy this unreasonable preference, the Commission orders the Postal Service to establish two parallel rate categories within First-Class Mail for round- trip DVD mail. One category establishes that DVDs sent as presorted First-Class Mail letters to subscribers will not be subject to the non-machinable surcharge when returned. The other rate category provides that DVDs mailed as First-Class Mail flats to and from subscribers will not be subject to an additional ounce charge.

    The PRC order gives the US Postal Service 60 days to comply with the order.

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