GameFly wins USPS discrimination dispute

The United States Postal Regulatory Commission has issued a ruling in favor of video game rental service GameFly's discrimination claim against the USPS.

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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).

Shacknews is owned and operated by GameFly Media.

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From The Chatty

  • reply
    April 21, 2011 1:00 PM

    Comment on GameFly wins USPS discrimination dispute, by Jeff Mattas.

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      April 21, 2011 1:02 PM

      gg gamefly. While I agree with them, there goes the USPS Saturday, Monday, and Tuesday delivery. Stupid lazy workers.

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        April 21, 2011 1:13 PM

        It's not cause they're lazy, it's cause the system is broke.

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        April 21, 2011 1:26 PM

        I still don't get how Gamefly should get special treatment akin to Netflix when they GF uses a different size envelope, and includes additional packaging.

        If it was identical, yes, I could see the different, but iirc GF's envelopes weigh more than Netflix's in part due to the extra sleeve that the game comes in.

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          April 21, 2011 1:30 PM

          I agree. I thought Gamefly was going to lose this case hard. I'm a bit shocked they came out on top.

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            April 21, 2011 2:23 PM

            me too.

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            April 21, 2011 2:27 PM

            If you knew anything about how they used different mailers in the past, the fact that they stopped the inserts for a while, or the fact that Netflix was just getting preferential treatment it would have been obvious they had a case.

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          April 21, 2011 1:43 PM

          The biggest thing to me is that netflix provides way more business which is why usps made a deal with them-a deal gamefly wanted a piece of.

          Its really sad that usps cannot make deals based on volume.

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          April 21, 2011 2:08 PM

          The problem was that Gamefly tried to forgoe the insert in the past, and used to mail in BRIGHT ORANGE mailers, but due to theft stopped that. They have tried to do everything to get the same treatment as Netflix but were denied. That's why they sued. My wife is a postal service worker and even questioned why they don't hand-sort out Gamefly envelops to her boss, and he said they only do it for Netflix. Netflix was getting special treatment, and now that treatment is applied to ALL businesses with a similar service. This is freaking awesome someone has enough common sense to see what was going on and that it was wrong.

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            April 21, 2011 2:29 PM

            ^^^^^^^^^^^^^^^^^

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            April 21, 2011 2:39 PM

            Ahh, they must've switched things up shortly after I quit.

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            April 21, 2011 3:47 PM

            GameFly was willing to change their mailers to be identical to Netflix (even if theft was a higher possibility) as long as they had the same prices/treatment as Netflix. USPS balked and the lawsuit happened.

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            April 21, 2011 6:54 PM

            "Netflix was getting special treatment" Netflix brings in much more business and should be treated better. Doing so is quite fair.

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              April 21, 2011 6:58 PM

              You don't see the problem with this? What if someone wants to compete with an established brand like Netflix?

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              April 22, 2011 6:58 AM

              postal service isn't a business and is not run for profit. it's an equal playing field for all parcels

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          April 21, 2011 6:10 PM

          you don't make any sense.

          gf uses a different mailer only because they aren't getting the special treatment that netflix does. if gf used the same thin mailer as netflix, the game discs would be crushed in the automated mail processing systems. netflix only gets away with using thin mailers because they were getting preferential manual-processing from the postal service.

          now that this issue has been resolved, gf will probably use thin mailers (if the particulars of the remedy ordered by the postal commission makes it financially beneficial.)

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          April 22, 2011 5:27 PM

          This is the whole point of the lawsuit.

          GameFly used to use the EXACT same envelopes as Netflix, but had to stop because the USPS's machines were destroying the discs. In other words, GameFly was FORCED to use more expensive packaging (the cardboard sleeve) in order to keep their product from being destroyed (on top of having to pay more than Netflix for shipping).

          Netflix doesn't have that problem because the USPS had a special arrangement that kept their mailers from being damaged.

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      April 21, 2011 1:51 PM

      I had Gamefly for a few months and couldnt even get new games even if i added them to my queue a month in advance. It is a very poorly designed service with limited resources and I think the USPS is just treating them how they treat their customers.... with no respect...

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        April 21, 2011 2:20 PM

        *shrug* I joined a month or so ago and got Crysis 2 and Portal 2 the Wed after launch.

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        April 21, 2011 3:38 PM

        I've been with GameFly for over two years and have never missed a new release if I have an open queue slot for it on release day. Your mileage may vary.

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      April 21, 2011 1:52 PM

      Why is the Money Losing USPS giving giving Netflix a Special Rate? I doubt Netflix is going to ship their millions of discs through UPS/Fedex.

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      April 21, 2011 1:59 PM

      doesn't really help when you take for fucking ever to ship stuff from your warehouse. im on a week and counting.

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        April 21, 2011 2:02 PM

        Yeah, I tried it two different times, average time between putting a game in the mail to return and getting the next... 2 weeks. I'm in metro denver, GG.

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      April 21, 2011 2:10 PM

      Take that, government!

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      April 21, 2011 2:11 PM

      Damn! Now that GF won't go bankrupt, how will we ever buy the Shack?!

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        April 21, 2011 2:13 PM

        Sabotage gamefly mailers?

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        April 21, 2011 2:16 PM

        Its ok, the shack is half dead anyways since the redesign, within a year you'll be able to buy it for under a million

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          April 21, 2011 2:19 PM

          Sad... but true :(

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          April 21, 2011 2:21 PM

          I've noticed the night time comments are a looooooot slower than they used to be. The day comments seem to be strong still, but the night ones are just dead.

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            April 21, 2011 2:28 PM

            it would be interesting to check total # of threads per chatty, but we can't do that anymore :P

          • reply
            April 21, 2011 3:12 PM

            If it wasn't for Lamp, honestly I'd have moved on as well. Sucks, I been shacking since 1998 :(

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            April 21, 2011 6:58 PM

            I feel similarly. Like 8pm PST is strangely slow now

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            April 24, 2011 11:25 AM

            I'm wondering if it's because of a change in the back end architecture. I know all of existing gamefly properties before the shack were all .NET based whereas shack was LAMP. I think the shack is now running on .NET.

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          April 21, 2011 3:52 PM

          I'LL BUY THAT FOR A DOLLAR! HAAAAAAAAAAAAAAAA

        • reply
          April 21, 2011 7:07 PM

          Very true, but it's not like it's beyond repair. Things could be fixed to be more friendly to the people who have been around here for years.

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          April 21, 2011 7:08 PM

          i wonder what front page stats are like. who cares about the comments we cost this place a ton of money

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      April 21, 2011 3:16 PM

      Great, so does this mean I will get reasonable service? Probably not.