GameFly wins USPS discrimination dispute

It's been two years since video game rental service GameFly filed a formal complaint against the United States Postal Service. Yesterday, the United States Postal Regulatory Commission (USPRC) ruled that the USPS was providing favorable treatment to other companies with similar rent-by-mail models like Netflix and Blockbuster.

GameFly alleged that these other businesses received "special processing" at the USPS facilities that substantially reduced the occurrence of broken or damaged discs, and provided them with a significant cost advantage.

Though the USPS denied claims of discriminatory treatment, the USPRC found in favor of GameFly once all of the evidence had been reviewed. According to the ruling, the USPRC "shall" order the USPS to "take such action as the Commission considers appropriate in order to achieve compliance with the applicable requirements and to remedy the effects of any non-compliance..."

All one hundred twenty-nine pages of the USPRC's report can be read online, but the gist of its major "findings and conclusions" are as follows:

  • The Commission finds that GameFly is similarly situated to Netflix, Inc.

  • The Commission finds that GameFly has received less favorable rates and terms and conditions of service than Netflix, Inc.

  • The Commission finds that the Postal Service has failed to establish reasonable and legitimate reasons for providing GameFly less favorable treatment than Netflix.

  • The Commission finds that the Complaint of GameFly is justified and that the Postal Service has unduly discriminated against GameFly in violation of 39 U.S.C. 403(c).

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