Gamefly seeks to force USPS to disclose details of Netflix deal
In a request filed with the Postal Regulatory Commission, Gamefly, a company that rents game DVDs via the mail, seeks to compel the US Postal Service to provide information the USPS says is off-limits.
In its motion, Gamefly says:
In its objections, the Postal Service seeks to place three kinds of information offlimits to discovery: (1) information about any aspect of preferential treatment received by Netflix other than the degree of manual processing of return DVD mailers; (2) information about the treatment received by DVD rental companies—other than GameFly—that have smaller mail volume than Netflix and Blockbuster; and (3) certain information about the Netflix-only drop slots at local post offices. These restrictions are unfounded.
Gamefly points out that the USPS has already admitted that Netflix receives special treatment:
The first issue has been resolved by the Postal Service’s own statements in this case. The Postal Service initially asserted that it had abandoned its practice of giving manual culling and manual processing to “the largest movie DVD providers” in the wake of the November 2007 report of the Office of Inspector General, and specifically “denie[d] that any ‘large percentage’ of inbound movie DVDs are processed manually.” Since GameFly began discovery, however, the Postal Service has admitted that the preferential treatment given to Netflix has continued or even increased since the OIG report. The Postal Service’s August 14 response to GFL/USPS-18, for example, admits that “the amount of manual processing of Netflix mail is likely at least as large as was set forth in the [Office of Inspector General Audit] Report, though no specific percentages are available.”
The Gamefly motion concludes:
A variety of information indicates that the Postal Service’s preferential treatment of Netflix is driven primarily by a desire to cater to a large customer, and that the operational needs that supposedly justify this discrimination are pretexts.
(1) Perhaps the most telling sign is the inability of the Postal Service to keep its story straight about whether it is discriminating at all. As noted above, at the outset of this case the Postal Service represented to the Commission that the practice of giving manual culling and manual processing to “the largest movie DVD providers” had been abandoned in the wake of the November 2007 report of the Office of Inspector General.
Since then, however, the Postal Service has admitted that Netflix DVD return mailers get at least as much manual processing as in late 2007.(2) In response to GFL/USPS-28, the Postal Service asserts that dedicated mail slots for Netflix DVD mailers in “lobby drops available for the public to deposit mail” are “against current Headquarters policy, as detailed in the attached Retail Digest.” USPS response to GFL/USPS-28 (filed August 14, 2009). The attached headquarters directive states that: In an effort to accommodate Netflix mail, some offices have created special mail drops and signage for Netflix returns. This is not an
authorized use of mail drop slots and it has legal ramification [sic] for the Postal Service.The headquarters directive is an admission that this form of preferential treatment for Netflix has no operational justification; and the “legal ramification” alluded to is presumably liability for discrimination under 39 U.S.C. § 403(c).
August 25th, 2009 11:12
Ask any former or current PO employee. They can tell you how net flix “does not” get preferential treatment.
August 25th, 2009 16:29
I am a city carrier and I can tell you that Netflix does get preferential treatment. They get manually culled from the rest of outgoing mail and put into there own lplastic trays and (I believe) sent directly to the closest Netflix facility. The joke around the post office is that Potter must have stock in Netflix.
August 25th, 2009 18:43
Netflix, Angelo, and the PMG; it’s good to have friends.
August 25th, 2009 19:53
You guys would know better than me but I doubt the post office would play favorites. Maybe Gamefly was concerned about increased volume due to the Gamefly Free Trial
August 25th, 2009 21:00
i am a rural carrier and i can assure you that netflix and blockbuster both get special treatment. just as jim stated earlier in the day, the netflix and blockbuster dvd’s are placed in containers separate from the other mail.
August 26th, 2009 23:30
In my small Post office we put the gamefly mailers in the same “special” tub that we put the Netflix and Blockbuster DVD’s. So Gamefly gets the same special treatment.. at least in our office.
August 27th, 2009 01:58
what is the address for the lawyers that are handling the case for Gamefly? Netflix does get preferential treatment at the GPO in Houston Texas via sanction of the Plant Manager.
August 27th, 2009 13:12
Retired PMG Bill Henderson is/was the CEO at Netflix!
September 11th, 2009 04:47
Paper CD/DVD mailers have to be pulled and sorted manually, otherwise they jam the machines and destroy other people’s mail. In reality *all* of them would be pulled out if possible. Its just that Netflix and Blockbuster are easier to notice (partially due to the volume, but mostly due to their bright recognizable color schemes).
Long story short – if you want to send a DVD or CD in the mail, and want to be sure it arrives intace, put it in a corrugated mailer, or a plastic disc mailer (remember how AOL CD’s came?)
October 7th, 2009 07:07
Netflix, DOES get preferential treatment. They ALWAYS have! These used to go through UPS before they switched to the USPS. They should get preferential treatment because they are such a huge mailer. This only makes sense. Don’t you think if you had millions of dollars in the bank you would get better service than some one else? If you had any business, and such a large customer as Netflix was your customer, don’t you think you would bend over backwards to keep their business?
October 13th, 2009 04:00
Give Me A Harder Problem To Solve: Solution: No Special-Handling(s):
Answer:
Allow Gamefly to develop and/or patent a user-friendly envelope that allows both envelope & content to be sorted through our Mail Processing & DPS Machines without damage…this will make Gamefly ‘light-years’ ahead of Netflix & Blockbuster. Gamefly then can license/sell patent rights to Netflix & Blockbuster and everyone’s mail will flow through out facilities without and special-handling(s) and/or concerns. Brilliant…Yes I Know!
October 13th, 2009 04:48
USPS: 21 Century New Revenue: Future Requires Aiding/Servicing Corporations In Designing Disc-Machinable Envelopes: Answer:
“Assign USPS Engineers In Merrifield, Va. A Task Designing Machine Friendly DVD/CD’s Disc-Envelope(s) That Will Sort Through Our Machines Thereby Eliminating, Extra: Processing, Special-Handling, Second/Third Handling(s), Staging-Areas, Equipment, Employees, Over-Time, Treatment, etc., etc., etc. .
This is just to easy…!