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Court Rules Against Netflix in Netflix-GameFly Postal Dispute

By - Source: Joystiq | B 18 comments

The U.S. Court of Appeals found that Netflix does indeed get preferential treatment by the USPS.

GameFly and Netflix have been butting legal heads over a U.S. Postal Service dispute for the past few years. GameFly, a gaming rental service that functions akin to Netflix, accused the video streaming and rental company of having the unfair advantage of preferential treatment by the USPS.

In their most recent clash, the U.S. Court of Appeals has ruled in favor of GameFly, finding that USPS did give preferential treatment to Netflix in its handling of DVDs. It has left it up to the Postal Regulatory Commission to solve the dispute and come up with a solution.

Despite Netflix and GameFly offering similar services, Netflix DVDs are sorted into separate compartments. "Rather obviously, this is not without cost to the postal service. Nonetheless, the service provides it to Netflix free of charge," wrote presiding Judge David Sentelle.

Hopefully, the Postal Regulatory Commission sets things straight with the USPS this time around. Back in April of 2011, the Postal Regulatory Commission had ruled in favor of GameFly over the same dispute. Unfortunately, PRC's ruling last time did little to alter the situation, hence why GameFly went to seek out the U.S. Court of Appeals. 


 

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  • 13 Hide
    rpgplayer , January 14, 2013 1:11 PM
    iknowhowtofixitThe USPS needs to be removed from existence.

    If you remove the USPS there would be two detrimental effects to the market; 1) FedEx and UPS couldn't keep up with the increase in demand, and 2) The prices from FedEx and USPS would double over night.
Other Comments
  • 3 Hide
    teaser , January 14, 2013 12:47 PM
    it only takes netflix one day from the time its mailed to get my dvds from them ...crazy
  • 5 Hide
    shloader , January 14, 2013 1:10 PM
    Why? And put what in its place? I know it's showing age but we need a solution that would still fit the times for everyone.
  • 13 Hide
    rpgplayer , January 14, 2013 1:11 PM
    iknowhowtofixitThe USPS needs to be removed from existence.

    If you remove the USPS there would be two detrimental effects to the market; 1) FedEx and UPS couldn't keep up with the increase in demand, and 2) The prices from FedEx and USPS would double over night.
  • 8 Hide
    ddpruitt , January 14, 2013 1:23 PM
    So Netflix does everything in it's power to make it easy for the postal service (presorts, mailers specifically designed for postal equipment, labels that are easy for machines to read, etc) while Gamefly does what it can to make the postal service's life difficult (different size mailers, various types of labels, etc) and they're complaining about preferential treatment? Guess what make your business partners life easier and they charge you less, that's the way the world works. I can't believe the court actually agrees with GameFly.

    Time to revamp the court system, decisions like this and others (Apple, Patents, etc) show that Judges really don't have any idea how it works out here.
  • 3 Hide
    ssd_pro , January 14, 2013 1:25 PM
    If UPS and FedEx took over it could be a disaster. Right now neither have an equivalent to USPS First Class or bulk pre-sort. Can you imagine your cost of Netflix if each DVD/Blu-ray needed ground service for $6.12? Or what about the economy with $600,000 people put out of work?
  • 2 Hide
    iknowhowtofixit , January 14, 2013 2:43 PM
    rpgplayerIf you remove the USPS there would be two detrimental effects to the market; 1) FedEx and UPS couldn't keep up with the increase in demand, and 2) The prices from FedEx and USPS would double over night.


    Last week I had to go to my local PO to get a refund for my guaranteed Express Mail package that was delivered late. The label was printed online. However, there is no way to start a claim against a package over the phone or via the internet (what year is this again?).

    I was well prepared with all of my documentation handy, including a copy of the original label (which they ask for but never actually expect you to have). I only stood in line for 5 minutes, but it took me an hour and a half at the counter. They tried every excuse in the book to try not to payment including, "The proper person isn't here who can approve this", "We are out of the forms for package claims", and "I bet it was just bad weather. Sorry, is there anything else I can help you with?"

    After having to fight with them on every little thing they tried to come up, they finally gave me the form, gave it to the right person, and figured out that there was no inclement weather that affected my package delivery.

    I was then given a money order, instead of cash, as a refund and was told to, "Have a nice day." I then asked where I can cash my money order. The guys response was, "Only at a United States Postal Service office."

    I told him, before walking away, "I'd like to cash this, then, please," and handed him the money order.

    The sad part is, this story doesn't even rank in my top 10 worst USPS experiences. It is just a recent adventure. The whole premise of guaranteed delivery dates and insured packages is a giant farce with USPS. Yes, they are the cheapest and sometimes only option. However, I can never support them as a "business" entity due to their malice toward customers.
  • 0 Hide
    sykozis , January 14, 2013 2:54 PM
    ddpruittSo Netflix does everything in it's power to make it easy for the postal service (presorts, mailers specifically designed for postal equipment, labels that are easy for machines to read, etc) while Gamefly does what it can to make the postal service's life difficult (different size mailers, various types of labels, etc) and they're complaining about preferential treatment? Guess what make your business partners life easier and they charge you less, that's the way the world works. I can't believe the court actually agrees with GameFly.Time to revamp the court system, decisions like this and others (Apple, Patents, etc) show that Judges really don't have any idea how it works out here.

    None of that makes a bit of difference. Fact is that the USPS goes out of it's way to show favoritism towards Netflix without charging extra....like they would if you or I were to ship a package of any type. THAT is the issue Gamefly has.
  • -4 Hide
    g00fysmiley , January 14, 2013 2:59 PM
    iknowhowtofixitThe USPS needs to be removed from existence.


    usps is one of the best companies out there in terms of cost of service. the only reason they are having money problems is an unfair policy required under the bush administration lobbied by private companies to force them to pay up front retirment costs for its employees many decades in advance thanks to the Postal Accountability and Enhancement Act of 2006 when it was already able to handle its current obligations just fien and stay profitable
  • 1 Hide
    plattyaj , January 14, 2013 3:56 PM
    ddpruittSo Netflix does everything in it's power to make it easy for the postal service (presorts, mailers specifically designed for postal equipment, labels that are easy for machines to read, etc) while Gamefly does what it can to make the postal service's life difficult (different size mailers, various types of labels, etc) and they're complaining about preferential treatment? Guess what make your business partners life easier and they charge you less, that's the way the world works. I can't believe the court actually agrees with GameFly.Time to revamp the court system, decisions like this and others (Apple, Patents, etc) show that Judges really don't have any idea how it works out here.

    So I can't comment on the accuracy of this since I don't use either service. But USPS does have bulk-mailing rules and it seems to me that if both sides comply with those rules they should be treated the same. And if USPS wants to create another service with tighter rules that have preferential treatment that should be it's right.

    But two courts have found that this isn't the case ...
  • 0 Hide
    itchyisvegeta , January 14, 2013 4:34 PM
    Shouldn't they be suing the post office, not Netflix?
  • 1 Hide
    plattyaj , January 14, 2013 4:41 PM
    itchyisvegetaShouldn't they be suing the post office, not Netflix?


    They did. That's this case.
  • -2 Hide
    slabbo , January 14, 2013 5:18 PM
    rpgplayerIf you remove the USPS there would be two detrimental effects to the market; 1) FedEx and UPS couldn't keep up with the increase in demand, and 2) The prices from FedEx and USPS would double over night.

    That's wrong, that's not how competition works. It would allow others to come in and try to provide a better service for maybe even less. If FedEx charged double everyone would just to to UPS, FedEx might even lower prices to get more customers, or another new company would come in to provide that service. If prices double, it's because of price fixing by all companies.
  • 0 Hide
    alidan , January 14, 2013 6:43 PM
    slabboThat's wrong, that's not how competition works. It would allow others to come in and try to provide a better service for maybe even less. If FedEx charged double everyone would just to to UPS, FedEx might even lower prices to get more customers, or another new company would come in to provide that service. If prices double, it's because of price fixing by all companies.


    if the bulk of the mail got shifted from usps to fedex or ups, either could raise their rates as much as they please, but they would have to stay even.

    lets say ups was 1$ and fedex was 5$ in this example
    people would shift to ups,
    they would fold under the pressure, and packages would get later and later
    people would than realise that fedex is faster and pay for the faster service
    usp would increas their cost to compensate for the extra crap they are dealing with
    things would even out, and fedex would raise rates again, and the cycle would continue.
    -------------------
    now
    imagine this
    you have a business partner, and they use your service so much, so often, that it benefits you to give them a reduced rate, and even ship their crap faster. gamefly i cant imagine is anywhere near as big as netflix, so they dont get the special treatment.
  • 0 Hide
    millerm84 , January 14, 2013 7:15 PM
    slabboThat's wrong, that's not how competition works. It would allow others to come in and try to provide a better service for maybe even less. If FedEx charged double everyone would just to to UPS, FedEx might even lower prices to get more customers, or another new company would come in to provide that service. If prices double, it's because of price fixing by all companies.


    When demand goes up and/or supply goes down prices go up. Removing a major service provider would generate more demand then either company could handle (unless we're talking about a slow phase out of the USPS) and would remove a major supplier. FedEx and UPS would likely keeps rates the same or raise them to allow them to build the infrastructure to accommodate the new demand thus increasing supply.
  • 2 Hide
    ddpruitt , January 14, 2013 7:25 PM
    plattyajSo I can't comment on the accuracy of this since I don't use either service. But USPS does have bulk-mailing rules and it seems to me that if both sides comply with those rules they should be treated the same. And if USPS wants to create another service with tighter rules that have preferential treatment that should be it's right.But two courts have found that this isn't the case ...


    There's a difference between complying and making it easy. I've worked in the industry and I can tell you that you get a HUGE discount if you make it easy on the carrier. Bulk mail requirements are fairly simple low volume (500 once) and presorted by zip code, this gives a commercial rate. Now let's say you go farther you presort (put everything destined for a specific zip code in on truck going that direction), pay for guaranteed high volume (even if you don't use it, say 10,000 pcs/day), and create packaging designed specifically for a carriers (in this case USPS) equipment they will give you discount for going the extra mile.

    GameFly does the first, Netflix does the second, and that's why they get discounts.


    Quote:
    None of that makes a bit of difference. Fact is that the USPS goes out of it's way to show favoritism towards Netflix without charging extra....like they would if you or I were to ship a package of any type. THAT is the issue Gamefly has.


    It's amazing as to how uneducated you really are.
  • 0 Hide
    iknowhowtofixit , January 14, 2013 8:09 PM
    Quite literally, USPS lost a package of mine today. Too big to fit in my mail box, nothing at my front door (been here all way since I work from home), and no notifications in my mail box. Yay, now I get to wait a couple weeks for an "investigation" to conclude before I can get new stuff sent or my money back...... yay.

    USPS, go @#$% yourself.
  • 0 Hide
    ven1ger , January 15, 2013 10:36 PM
    iknowhowtofixitQuite literally, USPS lost a package of mine today. Too big to fit in my mail box, nothing at my front door (been here all way since I work from home), and no notifications in my mail box. Yay, now I get to wait a couple weeks for an "investigation" to conclude before I can get new stuff sent or my money back...... yay.USPS, go @#$% yourself.


    Well, then I suggest that you select either UPS or FedEx to ship your packages, and accept the cost. UPS and FedEx also loses packages, its actually scarier when I get FedEx packages, because they don't like walking down my steps to my house. Many times I've found stuff left by FedEx (don't get too many items via UPS) in my carport or at the top of the steps where the sidewalk is. I'll say this for USPS, any packages that don't fit in the mailbox, the mailman walks down the steps (29) and drops it off on my porch if no one is home. Have yet to experience USPS failing to deliver a package to me, though same is true for FedEx just don't like how they leave packages. Though a co-worker lives in the same neighborhood, lost two Fedex packages recently.
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