In a high-tech dispute over snail mail, GameFly scored a victory Friday in its complaint over the U.S. Postal Service?s handling of Netflix mailings, when a federal appeals court ruled that the post office discriminated against the popular Internet-based video game-rental service.
GameFly had filed a complaint with the commission regarding the Postal Service?s treatment of Netflix. Both companies specialize in mailing disks, which are the right size and weight to qualify for one ounce mail. However, that type of mail is sorted by automatic machines that put the disks at risk of damage.
The Postal Service spares Netflix this risk by sorting its mailings by hand in specialized containers, at no extra cost to the company, but rejected GameFly?s request for the same treatment. The decision costs GameFly millions, the court says, because the company is forced to mail its disks in flat mailers at a higher weight, upping the cost per mailing.
The Postal Regulatory Commission agreed with GameFly that the Postal Service?s actions were discriminatory. However, Friday's unanimous decision from a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit said that the commission?s solution (to lower the cost of the flat mailings for GameFly) ?left discrimination in place without reasonable explanation,? as it did not address why Netflix is sorted in a different manner.
The ruling, written by Chief Judge David Sentelle and posted here, ordered the commission to reconsider the case and ?either remedy all discrimination or explain why any residual discrimination is due or reasonable under? postal law. While GameFly asked the court to order that the game firm's suggested remedies be put in place, the judges left it up to the commission, saying there may be alternatives that survive appellate review.
The Postal Regulatory Commission declined to comment on the ruling.
GameFly?s CEO, Dave Hodess, praised the ruling.
?We are very pleased by the decision. GameFly has been trying for more than five years to get the Postal Service to take seriously its obligation not to discriminate unlawfully among its customers. We trust that the Commission will take the court?s decision to heart and require the Postal Service to be compliant with the law by offering the same price and quality of service to all DVD rental companies,? Hodess said in a statement.
UPDATED: (Saturday, 12:29 a.m.) This post has been updated to add comment from GameFly.
Read more about: U.S. Postal Service, D.C. Circuit, Netflix, Video Games, GameFly, Postal Rate Commission
Source: http://www.politico.com/blogs/under-the-radar/2013/01/gamefly-scores-snailmail-legal-win-153974.html
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