The United States Postal Service has denied that it is providing preferential treatment to the competitors of videogame rental-by-mail service GameFly, and today filed a motion to partially dismiss the company's complaint.

"In short, the Complaint lacks merit and fails to articulate grounds for any relief," said the USPS in its 26-page response. "[GameFly] seems to believe that problems of its own making can somehow be solved by the Postal Service when, in fact, they cannot--at least not without incurring costs that would be a disservice to all other mailers."

GameFly, the parent company of Shacknews, filed a formal complaint against the USPS in late April. It alleges that the USPS "adopted a practice of manually culling out the DVD mailers" of Netflix and soon-to-be-rival Blockbuster, providing the "high-volume shippers" with "special processing" that reduces the amount of broken discs and supplies a "substantial cost advantage" in mailing-related expenses.

The Postal Service strongly denied that it is providing preferential ... Read more

Online game rental service and Shacknews parent company GameFly today filed a formal complaint against the United States Postal Service, alleging that the USPS provides competitor Blockbuster with preferential treatment to cut down on broken discs.

"GameFly is not the only mailer to experience significant DVD breakage rates on automated mail processing equipment," reads the filing. "In response...the Postal Service has adopted a practice of manually culling out the DVD mailers of two high-volume shippers of DVDs, Netflix and Blockbuster, for special processing."

The company said its request for manual processing "comparable" to that of the movie rental services was denied, which puts GameFly at a disadvantage as its "larger and longer established" rival Blockbuster plans to rent games by mail... Read more