Court says Postal Service provided special handling for Netflix DVDs

Netflix (Nasdaq: NFLX) has been getting a little extra help from the U.S. Postal Service when it comes to delivering DVDs in a timely manner, a federal appeals court in Washington, D.C., has determined.

In a ruling that served as a victory for competitor GameFly, the appeals court said the U.S. Postal Service provided special handling for Netflix DVDs and ordered that it stop or that a "good explanation" for continuation be offered, according to a CNBC story.

That may not be exactly what GameFly was seeking, since the competitor wanted the post office to treat its games in a similar manner. Since Netflix is the biggest DVD mailing customer the Postal Service has, it got special treatment, including processing Netflix DVDs by hand and in specially designated containers.

Postal Service spokesman David Partenheimer told CNBC in an email that this type of special treatment "was fully justified and reasonable, and consistent with the law."

Judge David Sentelle, meanwhile, questioned whether this treatment was reasonably provided "free of charge" since it "[r]ather obviously… is not without cost to the postal service."

The final decision on what's to be done about this was left in the hands of the Postal Regulatory Commission, which "must either remedy all discrimination or explain why any residual discrimination is due or reasonable," the judge wrote, remanding the case back to the Commission, which regulates the Postal Service.

For more:
- CNBC had this story

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