Nintendo calls EU's $234m price-fixing fine 'illegal'

by James Ransom-Wiley { May 20th 2008 at 2:00PM }

Nintendo has called a €149.1 million ($233.6 million) fine levied by European Union regulators for price fixing "unfair, illegal, [and] even shocking." In 2002, the commission fined Nintendo and seven distributors a total of €167.8 million for colluding to raise prices of game consoles and software from 1991–1998. While Nintendo isn't denying the profit boosting efforts, it claimed yesterday in the European Court of First Instance in Luxembourg that the portion of the fine owed by the game company is unjustified and discriminatory -- and indeed, at the time, was the largest ever punishment for colluding with distributors. The commission stood by its initial ruling that the steep penalty reflected Nintendo's role as producer and supplier of the price-jacked goods. It was Nintendo's responsibility to prevent price fixing and failure to do so merited the fine, the commission stated in court filings.

Tags: BreakingNews, eu, law, nintendo

Reader Comments (Page 1 of 2)

samfish @ May 20th 2008 2:05PM

Now Nintendo knows how MS feels.

Wii60 indeed.

McWeen @ May 20th 2008 2:06PM

And as a form of revenge they delay all European releases for even longer periods of time.

Benny @ May 20th 2008 2:12PM

Nintendo of Europe are already dead to me.

Shitty PAL versions of virtual console games; no Phoenix Wright 3; a lack of acknowledgment that Professor Layton even exists; oh, and that little matter of Super Smash Bros...

Kassu @ May 20th 2008 3:26PM

Ninty, why do you hate us?

Awsome pic.

Joshua @ May 20th 2008 8:57PM

Yeah, I really feel sorry for you guys now. Nintendo has really screwed Europeans around for far too long.

arrrgh @ May 21st 2008 12:33PM

wtf is europe? ;)

reguy @ May 20th 2008 2:07PM

Irony!

Jon @ May 20th 2008 2:08PM

The fine has not made a difference to Nintendo's attitude towards Europe.

Benny @ May 20th 2008 2:08PM

Of course a company being fined such an extraordinary amount is going to call it 'unfair'. I think the fact the EU is taking such action is a very positive thing. Monopoly power is an issue, and with EA seeming to want to buy everything in site, it would be nice if a little more investigative work was done by US anti-trust committees.

ScottG13 @ May 20th 2008 2:20PM

Setting MSRP on your own console platform does not constitute a monopoly unless Nintendo colludes with other distributors to prevent other consoles from being available in the market.

This strikes me as strange. If setting an MSRP is price fixing, then ALOT of price fixing is going around in pretty much every country.

Benny @ May 20th 2008 2:37PM

But it is not about MSRP (or RRP here in the UK). It's be levied because between 1991 and 1998 - during most of which Nintendo had a very significant market share - Nintendo managed to artificially keep prices high and I presume earn a lot of abnormal profit. How are they accused of doing this? Supplying consoles at a high price, and doing nothing when other suppliers agreed to keep the price high.

idiot @ May 20th 2008 2:11PM

i can't believe it. T

hats shocking!!

baby sea tuna @ May 20th 2008 2:13PM

C

lever.

JaKa (Because 666 gives a wrong impression!) @ May 20th 2008 3:15PM

:

P

Geist @ May 20th 2008 5:04PM

W

hat?

Benny @ May 20th 2008 5:11PM

I'd like to take this opportunity to kick a dying joke while it's d

own.

meist3r @ May 20th 2008 2:13PM

Well too bad the system here isn't as loyally corrupt as in Asia. Sometimes the lobby work fails and then you have to pay a lot of money to the government. It's the opposite of the bribe system they have. There you bribe single people every year and here they have to bribe countries or unions every other year big time. That's what we call capitalism. Everybody wants in on the money and if you make lots of it you will have to pay someone. WHO entirely depends on the corruption culture. Here in Europe we have century old experience with hi-level corruption so this is were it takes place. You really think the EU fines them because they broke the law? Who cares, our economy is breaking laws left and right and cartels are really no exception. Frankly I believe they're getting sued for $230m in hard currency. Someone in the investigation committee earned some respect for such creative methods.

Benny @ May 20th 2008 2:41PM

I seriously doubt the EU is just riding on Nintendo's recent success. The fine was originally issued in 2002...

meist3r @ May 20th 2008 2:50PM

I never said it was because of the latest success. That would only be another argument for it. It's not like Nintendo didn't make any revenue before the DS or the Wii. What I mean is that it's their turn to pay up for the success they've been granted. Microsoft has close to a billion dollars in fines from the EU for their business practices and Nintendo is probably not that far behind when it comes to corporate "resourcefulness". But unless Microsoft Nintendo hasn't tried to force consumers to use their products so they're (a little) better off legally.

JaKa (Because 666 gives a wrong impression!) @ May 20th 2008 3:25PM

...and that's all because Nintendo knew that JFK was killed by an Area 51 Alien as he was about to make a public statement about Fake Moon Pictures.

Dude, I'm all for a good conspiracy theory every once in a while but seriously stop smoking that shit.

meist3r @ May 20th 2008 3:43PM

@JaKa: What are you talking about? An authoritative union of states that fines a global company for misusing it's market power is a conspiracy theory? Where did you read that in my post. Was it the "success they've been granted"? That's no conspiracy, not even a theory. When someone does something particularly bad but not too bad, and you as the landlord and tax collector happen to make some profit off of these practices it's a natural thing in the beginning you will smile and let them proceed. Since it's not too bad and nothing seemed illegal at the time, well, "that's just how it goes" one would say. And now that this has been going on for a long enough time and they rediscover their duty as administration they fine them. Has nothing to do with profit, but they have to do something anyways because of responsibility and public/corporate attention.

I never claimed the EU did that solely to get some money out of Nintendo. All I meant was: They had it coming.

kip (SSBB:3437-2813-1377) @ May 20th 2008 2:19PM

So how much does Harmonix get fined for the ungodly Rock Band pricing?

Donald @ May 20th 2008 3:34PM

Wouldn't EA be the ones getting fined?

And in order to win at irony, the fine would be 599 million Euros.

Lars @ May 21st 2008 11:42AM

I always felt Rock Band was way cheaper than it should be. I snagged it quick, afraid they made a mistake... Oh, wait, are you talking about EU? I know nothing of their pricing/economy.

Mr Khan @ May 20th 2008 2:19PM

Well duh they're gonna protest it

However, i think it's an odd span of time to look at: 1991-1998 includes a generational transition, and thus it would be hard to track illegal price fixing across that span when the items being fixed change so radically

I like the EU, though, they have it out for the megacorporations, and don't really make many bones about it

[.sm0ke.] @ May 20th 2008 10:23PM

1991 to 1998... it's 2008 now. What took the EU so long?

joshua @ May 20th 2008 11:52PM

.smoke, its called building and presenting a case. Things don't happen overnight you know.

James Lockwood @ May 20th 2008 2:22PM

For the record, I'm LOVING this new advertisement structure you have.

LOVING it!

I should not need to point this out, but after my last sarcastic comment was taken seriously and got rated down, I guess I should make it clear. *This is a sarcastic comment.*

I understand the need for adverts, but I seriously struggle sometimes getting from one page to another - I sigh everytime the dreaded black screen devoid of content appears and locks me out.

Martez @ May 20th 2008 2:25PM

Firefox + Adblock Plus.

James Lockwood @ May 20th 2008 2:31PM

Should I have to do that, though? Should all the people that view the site with less interest than me be expected to do that?

PojoMofo @ May 20th 2008 2:31PM

would you rather have to pay a subscription fee.

Is it REALLY a big deal to hit the back button on your browser and hit the link again??

an dI seriouly get the black screen once every hour, maybe, and Im here a lot

aristokrat @ May 20th 2008 2:53PM

Or Safari and no other messing around, never experienced any of the problems you guys talk about. Maybe that's the primary browser they develop for here, since a lot of them seem to like Macs.

meist3r @ May 20th 2008 2:57PM

* Should I have to do that, though? Should all the people that view the site with less interest than me be expected to do that? *

Well you will have to, it's not exactly in the interest of ad sales to have these "less interested" people around. They never buy anything and who needs them anyway. I think Noscript or Adblock are both good free ways to claim back some of your customer freedom. And anyways, go to IGN.com if you want to see what a really screwed up ad concept looks and feels like. I don't mind killing a popup but signing up for a pdf download and all that crap? Really? Weblogs Inc. is really one of the less infested sites I know. And for being an AOL company that's pretty impressive to boot.

Nate @ May 20th 2008 3:02PM

I use firefox and adblock also. I wouldn't have to use it if sites wouldn't allow such god awful ads. I don't mind seeing a *static* banner ad for WiiFit, or banners on the sides for other related things, or google adwords.... but when they're moving ugly ass monstrosities advertising unrelated garbage like vonage or verizon AND they're large flash downloads that slow my entire browsing experience, I take offense, and then I shut down the ads on that webpage entirely. It's my browser, I choose what to show in it. If a site wants me to see an ad, they should think about what kind of ads would be acceptable on their favorite sites. Penny-Arcade is a pretty good example, in that they only allow advertisers of products they are willing to have associated with their site. More sites need to think like that.

For sites that don't abuse the ad privilege, I keep them visible, because I know it helps out the site. For a site with as much traffic as Joystiq, you'd think they'd be able to be more discriminating in their acceptance of ads.

Raikage (LDF CRAB BATTLE!!!) @ May 20th 2008 3:06PM

O M G for the last time, that freaking red stop sign with the letters "ABP" in the corner of my browser does NOTHING to block those ADs. Stop saying it does!

meist3r @ May 20th 2008 3:16PM

@Raikage:
Try NoScript, I see no ads at all. No videos that I don't want, no flaoting popup windows and no silly cookie tracking scripts and all that nonsense. Takes a few clicks to configure for each site but that's worth it once it's set. Never tried Adblock, from what I hear ... never will. Since most of the annoying ads are loaded or run with Javascript or similar this will get rid of all of them. Another nice feature is that it shows you which domains try to load ads into the page. You enable only those that you need for the site and you're good.

https://addons.mozilla.org/en-US/firefox/addon/722

Zertoss @ May 20th 2008 3:22PM

Firefox + AdBlock Plus + NoScript

Because the Internet cannot be trusted.

Korova @ May 20th 2008 3:46PM

I agree, James. I dont Joystiq flipping me the bird once in a while if I can pass around it quickly, but on Firefox the back button doesnt work, the "skip commercial" button is a cruel joke (i.e. it freezes the site) and having to go into the address bar to reload the page is too much for me.

If Americans had to press one button on the remote to get past a commercial on TV, this country would have the best soccer team in the world and obesity would not be a problem.

Korova @ May 20th 2008 3:47PM

I dont "mind" Joystiq ...

Mr Khan @ May 20th 2008 4:09PM

When i use my laptop with IE7, now when i hit "Skip Commercial" the little button disappears and the commercial keeps playing, and doesn't go away when its done

You guys REALLY need to fix this

Raikage (LDF CRAB BATTLE!!!) @ May 20th 2008 4:12PM

Heeeeeeeyyyy No Script seems to be working good so far, thanks bro!

Lars @ May 21st 2008 11:48AM

I agree with Nate. I can't stand how much of a resource hog the ads are. Related lightweight ads are OK (such as google adwords). Pisses me off that I can't browse Joystiq or its sister sites on my portable because it either takes forever or just won't load due to lack of memory.

Anni @ May 20th 2008 2:32PM

Price-jacked goods? Look, the Wii Wheel's not... THAT much money.

carg0 @ May 20th 2008 2:39PM

Nintendo has a long standing history of ripping off their merchants and customers with impunity. the only difference being the customers; too stupid to notice.

apparently, they must think the regulators are just as stupid.

John McPoop @ May 20th 2008 2:46PM

Bad Nintendo

*slaps wrist*

It seems to me prices are still fixed ... Its not very often you see a game on the PS360 not going for $59.99 USD and $49.99 USD for the Wii

Pisses me off that these game cost so much damn money ...

Random Thought:

I picked up a eeePC the other day for $399.99 ... That is one awesome little UMPC

Sir Fidlious Wong (Justin T. McElroy Memorial Burn of the Day Award) @ May 20th 2008 2:59PM

methinks you have no clue on how this whole thing occured. It's actually similar to when Nintend was found guilty of anticompetitive practices in the US long long ago.

Basically Nintendo constrained the flow of product into the channel thus keeping rarity high and supporting the gouging at the retail level. Now, normally as electronics get older, the are suppose to drop in price. NES in the US didn't do that and since Nintendo also used bullying tactics against retailers to keep Sega Master System and TG-16 out of stores except those specializing in the field (Toys R Us, Children's Palace) or those too big so they could just yell a fuck off (Wal-mart), they were found guilty in the US.

As for Europe, there was a period where SNES games, due to rarity in the channel, was going for downright extortion level pricing and the constrained supplies in the channel allowed Nintendo to essentially keep their hardware at a static price for 3+ years.

THAT is what Nintendo got busted on. And unlike the amount they were ordered to pay in the US, there is no steps Nintendo can take to try and avoid paying the full fee. Pointing once again, these companies are NOT your friends. They are companies.

These tactics have since been backed off of quite a bit. And no, they are not doing the same with Wii and DS. So in that regard, things are improving but Nintendo Europe still remains largely a dick.

Sir Fidlious Wong (Justin T. McElroy Memorial Burn of the Day Award) @ May 20th 2008 3:04PM

Also, in regards to expensive games, the industry has reached an interesting paradigm shift. Cartridges used to be the factor keeping game prices high and titles like Chrono Trigger and MK Trilogy with their $85 MSRP. Games were cheaper to dev back then but materials were not.

Now materials are cheaper from packaging to media cost, but the cost of development has skyrocketed. So while games are about Sega Genesis level pricing (well, except the $90 Virtua Racing) nowadays, people are propagating this idea that somehow we are getting more "screwed" nowadays. Now keep in mind, this of course counts the fact that Video Games as a industry still have no other routes besides retail chains to pull their profits from, a huge difference from every other media format.

John McPoop @ May 20th 2008 9:31PM

@Fiddy

I never pretended to act like I knew how the things worked behind the scenes. Afterall you are the one working on flight simulator games not me.

It seems with digital downloads there are more revenue streams for these companies and console manufacturers than ever before.

I am in my mid twenties and I have been playing games since I could walk. I am guessing from your reply you are either much much older or you know the history of the retail prices of games in excess (not that its a bad thing).

I like to think of the Gran Turismo Prologue some people brought up. Skeptics and critics would say your getting 1/20th of the content for 2/3 of the price. Well by that same flawed train of thought how can these companies sell Halo 3 for the same price of say Turning Point Fall Of Liberty?

Unofficially I would say that about 95% of all new release games retail for the full price of $59.99. I have a major problem paying that price for a game like Heavenly Sword which had maybe 5 hours of length compared to say GTA IV. Both are great games and I know if I don't want it I don't have to spend my money on it but my point is how can EVERY go for the ful retail price of $59.99 even when its not justified?

Are we getting raped by the retail chains or the developers of any particular game?

I know it may be comparing Apples to Oranges but look how the prices of movies and CD's have come down over the years generally speaking. You even see these chains sell a DVD movie for $5.00-$8.00 cheaper during the initial week of release. However, game NEVER have specials or discounts unless the game doesn't sell (moving inventory) or if it's used. If the game still sells in big numbers they will not reduce in price over a year later. Look at Gears Of War - I saw it in my local Best Buy still retailing for $59.99.

Maybe I don't understand everything that goes into the pricing pyramid but I do have the feeling there is an understood collusion going on with the prices of games at some level (Nintendo issues aside in the article). Whether its the retail chains or the developers I don't know.

I can go on price grabber, Amazon, Best Buy etc and find a lower priced DSLR digital camera or even a front loading steam washer for a lower price (same product). I have never seen a consistant lower priced video game from a different store unless it was some sort of special coupon or a "stopwatch sale". That is of course excluding an older game and the moving of excess inventory. My local Best Buy is selling that John Woo game for about $15.00 now. Mainly because they have to constantly make room for more inventory and they are getting rid of old crap.

Where is the $59.99 coming from?

Don't you think if a big time game released for say $39.99 it would sell a million more copies. At that price you could take a flyer on it.

$59.99 is not alot of money but when you buy a couple of games in a row you really feel it.

jswanson @ May 20th 2008 2:56PM

Why should so-called "price fixing" be any sort of crime when dealing with video games? If people don't want to pay high prices, then they shouldn't. The prices adjust according to supply and demand. I realize this becomes problematic if business spike prices with vital resources (gas, food, etc) but with video games? Seriously, and who is going to reap the fines from this lawsuit. The government, yay for them.

meist3r @ May 20th 2008 3:04PM

* If people don't want to pay high prices, then they shouldn't. The prices adjust according to supply and demand. I realize this becomes problematic if business spike prices with vital resources (gas, food, etc) but with video games? *

Uhmm, did you try to buy a Wii in Northern America lately? There is no supply, only demand. The prices for Wii software are ridiculous in some parts (just today Amazon US announced selling Okami for $29.99 the German Amazon sells it for 44.95€ = ~$69.96) why is the disc and a box with artworks in it worth more than twice the price of another location? This has nothing to do with price correction according to demand. The game is not even out here yet and still it's twice as expensive as in the US. These discs are made somewhere in Asia anyway, be it PAL or NTSC. It's not shipping, it's not material, it can't be advertisement because there is practically none and it isn't high demand. Then what, or more specific WHO, is it?

If that's not a cartel from the textbook I don't know what it is. And that's just the stuff that's illegal. The suit right now is about 1991-1998 ... what else did go on in the last ten years then? We'll probably find out in 2018.

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