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WASHINGTON -- A federal court says the U.S. Postal Service must come up with a better solution to its questionable pricing structure affecting Gamefly's video game DVDs and Netflix's movie DVDs.
Gamefly must pay extra to mail its rental DVDs because they can be damaged by automatic mail sorting systems for first-class mail. But DVDs sent by Netflix Inc. don't go through the automated sorting process and it doesn't pay extra for hand-sorting. Gamefly was denied the same treatment and sued.
The Postal Regulatory Commission agreed that the practice was wrong, but came up with a scheme to make it cheaper for Gamefly but still force it to pay more than Netflix. The U.S. Court of Appeals for the District of Columbia Circuit overturned the commission and sent the case back.