The U.S. Postal Service gave an unfair advantage to competitors like Netflix and Blockbuster Video, a regulatory board said Wednesday, awarding game rental service GameFly a victory in a two-year dispute over the postage, breakage and sorting of its disc mailings.
The Postal Regulatory Commission found that the USPS gave "an unreasonable preference" to Netflix's mail, and ordered that the Postal Service create two rate categories for the DVD mailings used by Netflix, GameFly and other rent-by-mail businesses. The categories will end the surcharges GameFly incurred for hand-sorting or for excess weight in its mailings, thicker and heavier for auto-sorting because of the cardboard protection sleeve around the disc.
GameFly had complained that its competitors had received hand-sorting, as opposed to auto-sorting, at no extra charge, significantly reducing its rate of disc breakage. The same benefit was not accorded GameFly, which said NetFlix's savings on the preferred rate amounted to its monthly profit.