Court: US Postal Service has been giving Netflix an unfair advantage

A federal court has ruled this week that Netflix has been receiving an unfair advantage from the US Postal Service (USPS) thanks to special handling of its DVD business.

The court also ordered regulators to offer a good explanation as to why, or remedy the discrimination immediately.

GameFly, the video game rental company, is the big winner in the case, as they originally claimed that Netflix's DVDs were receiving the preferential treatment over their own discs.

The ball is now in the Postal Regulatory Commission's court, as they will either have to come up with the explanation or "remedy all discrimination."

Adds GameFly: "We trust that the commission will take the court's decision to heart, and require the postal service to be compliant with the law by offering the same price and quality of service to all DVD rental companies."

Netflix is the USPS's biggest DVD mailer by a long shot, and the company added after the ruling that "the different treatment that we provided to our customers was fully justified and reasonable, and consistent with the law."

Written by: Andre Yoskowitz @ 14 Jan 2013 0:40

SomeBozo

Why is this a surprise? Seems other companies do this too? Price cuts for large volumes, going the extra mile to ensure a large customer will keep there business with you. Perhaps junk main solicitors will not get preferred treatment any longer too? This might be a blessing in disguise, i've always heard the post office will always deliver that crap because they get so much revenue from them. So junk mailers shouldn't get preferred treatment and price breaks either.

It isn't like netf1icks gets free postage, and i would bet good money netf1cks will put a lot more revenue into the postal service then does gamef1y.

14.1.2013 01:45 #1

Bozobub

I have to agree. To expect the Postal Service to behave like a private corporation and make a profit, as we already do, is boneheaded enough, and is even more difficult due to the insane pension funding requirements they have to meet. Suing them (or allowing them to be sued) when they actually act like a corporation is profoundly submoronic and unproductive, in my opinion.

14.1.2013 01:53 #2

Justoneguy

I guess we better start suing Vegas for giving special treatment to the whales. Why the F*ck didn't I get the rain man suite!?

14.1.2013 02:11 #3

xboxdvl2

its the discs are paid and sent through standard mail,same fees then they should be handled the same.

i have the big screen tv,a ps3 and 5.1 channel surround sound.car still runs smooth and computer still works but its a bit outdated.

14.1.2013 04:34 #4

KillerBug

Originally posted by xboxdvl2: its the discs are paid and sent through standard mail,same fees then they should be handled the same. Gamefly envelopes are heavier.
Gamefly ship fewer disks.
Gamefly customers usually only get 1 disk at a time while netflix customers usually get 2-3 at a time.

That doesn't seem like the same thing.

14.1.2013 04:58 #5

ZippyDSM

I have a simpler answer to all this, netflix is the larger dvd mailer in the US, they had to change some stuff to stop breaking so many discs. Causation or correctional desu......

Copyright infringement is nothing more than civil disobedience to a bad set of laws. Lets renegotiate them.

---
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14.1.2013 13:18 #6

Bozobub

I don't think it really matters. Providing certain types of preferential treatment to very large clients is obvious good business. If we're going to expect the USPS to operate like a private corporation, that's supposedly supposed to ultimately make a profit (which is asinine, in my opinion; it's like charging a direct fee per police call), then legally requiring them to NOT act like a private corporation at the same time is freaking schizophrenic.

I think we should operate the USPS just like any other obviously beneficial social program. It would cost us all far less for the same service, as a country and as individuals, if we went back to the pre-'80s USPS-as-gov't.-bureau model.

This is all quite similar to the fiasco when the GPO (Government Printing Office) was essentially farmed out to the private sector. Instantly, as a nation, we were not only paying the ORIGINAL costs (wages for the workers + materials), we were paying for someone's profit (generally 12-18%), as well! Additionally, since each smaller private printer can't buy materials in the same volume the GPO could, the materials themselves also cost more, which drove the cost even higher.

Every time some silly GOP ninny tries to blather on about privatizing social security or some other government function, just remember how oh-so-well (yeah, right) it worked for the USPS (semi-privatized) and the GPO, then ignore anything else they have to say.

14.1.2013 14:54 #7

ZippyDSM

Originally posted by Bozobub: I don't think it really matters. Providing certain types of preferential treatment to very large clients is obvious good business. If we're going to expect the USPS to operate like a private corporation, that's supposedly supposed to ultimately make a profit (which is asinine, in my opinion; it's like charging a direct fee per police call), then legally requiring them to NOT act like a private corporation at the same time is freaking schizophrenic.

I think we should operate the USPS just like any other obviously beneficial social program. It would cost us all far less for the same service, as a country and as individuals, if we went back to the pre-'80s USPS-as-gov't.-bureau model.

This is all quite similar to the fiasco when the GPO (Government Printing Office) was essentially farmed out to the private sector. Instantly, as a nation, we were not only paying the ORIGINAL costs (wages for the workers + materials), we were paying for someone's profit (generally 12-18%), as well! Additionally, since each smaller private printer can't buy materials in the same volume the GPO could, the materials themselves also cost more, which drove the cost even higher.

Every time some silly GOP ninny tries to blather on about privatizing social security or some other government function, just remember how oh-so-well (yeah, right) it worked for the USPS (semi-privatized) and the GPO, then ignore anything else they have to say. Well some things should be fully privatized with government over site like mitrlarty budget and prison building, your on your own to pay for that shit :P /lulz

Copyright infringement is nothing more than civil disobedience to a bad set of laws. Lets renegotiate them.

---
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14.1.2013 15:18 #8

SProdigy

Not only the special equipment scanners, but Netflix transports the discs to and from their warehouses, which I'm guess, they have more distribution centers than GameFly or other competitors.

link

Sounds like a bunch of crying if you ask me. Netflix has to be one of USPS' largest customers. I think they deserve the preferential treatment, just like I get to sit in a VIP or earn my airline miles.

14.1.2013 15:20 #9

Notcow

In the same way Google cannot give preferential treatment to certain companies via it's search algorithms, USPS (especially since it's operating under the discretion of the federal government) should not be allowed to give preferential treatment to "it's best customer". It's anti-competitive.

The government is taking part in empowering a system of anti-competitiveness by giving Netflix this treatment while denying the same treatment to its competitors. Shame shame.

14.1.2013 16:14 #10

ZippyDSM

Originally posted by Notcow: In the same way Google cannot give preferential treatment to certain companies via it's search algorithms, USPS (especially since it's operating under the discretion of the federal government) should not be allowed to give preferential treatment to "it's best customer". It's anti-competitive.

The government is taking part in empowering a system of anti-competitiveness by giving Netflix this treatment while denying the same treatment to its competitors. Shame shame.
Not really, its called volume discount. The more you send the more discount you get. If it goes beyond that get out the napalm and fry im.

Copyright infringement is nothing more than civil disobedience to a bad set of laws. Lets renegotiate them.

---
Check out my crappy creations
http://zippydsm.deviantart.com/

14.1.2013 16:15 #11

Notcow

Originally posted by ZippyDSM: Originally posted by Notcow: In the same way Google cannot give preferential treatment to certain companies via it's search algorithms, USPS (especially since it's operating under the discretion of the federal government) should not be allowed to give preferential treatment to "it's best customer". It's anti-competitive.

The government is taking part in empowering a system of anti-competitiveness by giving Netflix this treatment while denying the same treatment to its competitors. Shame shame.
Not really, its called volume discount. The more you send the more discount you get. If it goes beyond that get out the napalm and fry im.
Maybe I'd be able to sympathize with that point if any other company was being offered a similar discount. I don't believe that Netflix doubles Amazon's volume of deliveries, however Amazon isn't offered any kind of special treatment. I'm sure Gamefly is giving USPS a very good amount of service, and they aren't offered any form of this "bulk discount".

The government is enabling this company to preform better than its competitors, and at a lower cost even! That is a "bulk discount" yes, you're right, but it's a bulk discount that no other company is being allowed to qualify for.

14.1.2013 16:38 #12

Bozobub

It's not a discount that's at issue, it's specific services the USPS has been providing Netflix.

14.1.2013 17:39 #13

ThePastor

Yeah, agree... it's not the discount. The discount is figured in based on quantity...
But, apparently this judge has never worked with a shipping company.
It's all about the perks you negotiate. If Gamefly didn't like the perks they weren't getting then they should have negotiated them.

Now, if you are going to try to say that the Post office deliberately mis-handled or slowed down delivery of Game-fly, so as to make Netflix more popular, then you'd have an argument. But if the issue is that Netflix get's handled quickly, frequently beating the average delivery time then, what's the deal?

Oh, Im sorry... Did the middle of my sentence interrupt the beginning of yours?

14.1.2013 18:13 #14

SomeBozo

Originally posted by Bozobub: It's not a discount that's at issue, it's specific services the USPS has been providing Netflix. True but USPS will facilitate different practices for different customers which might make it easier for them to process. When I younger and worked for a small company, we got a discount if we submitted our outgoing mail in sorted order by zip code. The real question seems does giving Netf1ix a preference like this make it easier and cheaper for the USPS? That issue doesn't seem like something we outside the USPS can answer.

14.1.2013 18:15 #15

tastee (unverified)

The Netflix discs are manually seperated because the machines for the regular mail sometimes breaks them. We seperate them and send them to Netflix. At the same time we also seperate discs for Blockbuster AND GameFly. They all are when seen pulled out of the normal mailflow and sent on their way. We really try to prevent damage of anything in the mail.

14.1.2013 19:24 #16

SomeBozo

Originally posted by tastee: The Netflix discs are manually seperated because the machines for the regular mail sometimes breaks them. We seperate them and send them to Netflix. At the same time we also seperate discs for Blockbuster AND GameFly. They all are when seen pulled out of the normal mailflow and sent on their way. We really try to prevent damage of anything in the mail. Heheheh, if that is the case, then it sure seems like a small nat in business trouble savaging for a law suit to get $$$ from netf1ix. Can anyone one say shakedown? I knew you could :)

14.1.2013 19:29 #17

SomeBozo

Originally posted by tastee: The Netflix discs are manually seperated because the machines for the regular mail sometimes breaks them. We seperate them and send them to Netflix. At the same time we also seperate discs for Blockbuster AND GameFly. They all are when seen pulled out of the normal mailflow and sent on their way. We really try to prevent damage of anything in the mail. Heheheh, if that is the case, then it sure seems like a small nat in business trouble scavenging for a law suit to get $$$ from netf1ix. Can anyone one say shakedown? I knew you could :)

14.1.2013 19:29 #18

KillerBug

Originally posted by Notcow: Originally posted by ZippyDSM: Originally posted by Notcow: In the same way Google cannot give preferential treatment to certain companies via it's search algorithms, USPS (especially since it's operating under the discretion of the federal government) should not be allowed to give preferential treatment to "it's best customer". It's anti-competitive.

The government is taking part in empowering a system of anti-competitiveness by giving Netflix this treatment while denying the same treatment to its competitors. Shame shame.
Not really, its called volume discount. The more you send the more discount you get. If it goes beyond that get out the napalm and fry im.
Maybe I'd be able to sympathize with that point if any other company was being offered a similar discount. I don't believe that Netflix doubles Amazon's volume of deliveries, however Amazon isn't offered any kind of special treatment. I'm sure Gamefly is giving USPS a very good amount of service, and they aren't offered any form of this "bulk discount".

The government is enabling this company to preform better than its competitors, and at a lower cost even! That is a "bulk discount" yes, you're right, but it's a bulk discount that no other company is being allowed to qualify for. Netflix is probably at least doubling Amazon's number of shipments...if you mean volume in the cubic feet sense, probably not. Amazon gets special prices for their bulk shipping...they still charge the customer list price, but they get their discount. The thing is tho...they ship all kinds of different boxes with different weights and dimensions. Some need signatures at delivery, some contain hazardous materials, and many have lettering on the boxes that has nothing to do with the shipping. On top of that, USPS is not an exclusive partner with Amazon...Amazon would ship by "hobo catching a train" if they thought it was possible. Still, Amazon gets a volume discount and if they could come up with special machines to save work for the USPS and thus get a discount, they would be installed in every USPS distribution center in the country.

15.1.2013 12:12 #19

jdwinty

Originally posted by Justoneguy: I guess we better start suing Vegas for giving special treatment to the whales. Why the F*ck didn't I get the rain man suite!? Or old people and their comps. hahahaha

18.1.2013 08:11 #20

DADEO1

I get my Netflix via the U.S.P.S. and the service is perfect. Don't mess with it. GameFly, really, that's it, negotiate a better deal the next time. Does somebody at GameFly work for D. Issa?

19.1.2013 07:22 #21

mightyzog

There is no way that gamefly had even 5% of netflixs volume. When I sort the mail I probably process tens of thousands of Netflix discs for every one gamefly disc I see. Volume discounts are not just for companies like these. Why do you think you see so many credit card applications and other mass mailings so often. Huge volume discounts. How about mass mailings from churches and govt officials who use their non profit designation to get huge discounts. And the funny part is that most of these mailings are terrible and require some additional " manual" sorting of some kind because of the manner in which they come in. Postal machines where designed before DVDs where shipped through the mail and they do not play well together.

Gamefly just wishes they were as big as Netflix. It's all just a big case of envy.

19.1.2013 09:32 #22

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