Slashdot Mirror
Nintendo Fined $143m for Price-Fixing
kyz writes "The BBC is reporting that the anti-trust branch of the European Commission has fined Nintendo 146 million euros (roughly $143m) for preventing its distributors from selling games as cheaply as they are sold in other European Union countries. For example, "prices of Nintendo products were up to 65% higher in Germany or the Netherlands than in Britain".
Now if only the EU could do this with Microsoft, Levi Strauss and the MPAA members..."
All they have to do is make a Pokemon game, and then paint it 4 different colors.
....the president of Nintendo flew up into the air and coins exploded from his body?
Does anyone else remember getting a check from Nintendo (in the late 80s) for like $5 or $10? Apparently they were price fixing the NES Unit for $99, and were order to pay a fixed amount to every registered NES owner.
Wouldnt it be great if the money fined went to all the people across europe who had bought all these high priced games!! Though I think thats unlikely to happen as it will no doubt go into the bottomless pit of the EU.
In the end the end user ends up paying this fine as although prices might come down in europe they will no doubt go up in the UK.
Slashdot linking to kuro5hin!?!? I thought giving people 30 mod points was bad :)
Disclaimer: I am not one of those people you see protesting around every IMF meetings
With that said, I swear to god, multinational cooperations have no conscience. Turn on the news, and all you see is the Enrons, Microsofts, and all these other coopertions who do everything they can to screw the consumer and their employees to make an extra penny. Good for the Europeans, bout damn time someone smacked those companies down, even if it is one with good Karma like nintendo.
To make laws that man cannot, and will not obey, serves to bring all law into contempt.
--E.C. Stanton
...that as part of the ruling, the head executives of the branches of Nintendo International concerned with this case will have large barrels hurled at them by a giant ape while trying to get up several stories of floors. In a press release, one of the executives said simply, "BEEP."
We now have confirmed reports from an informed Orange County minister that Ethel is still an active communist.
Nintendo has always tried to make as mcuh money as they can from their conoles. You got to remeber some countrys have higher bnp than others, plus nintendo makes money from the games sold not the consoles.
I fought the corporate America, and the corporate America bought the law.
Sounds like they are just trying to get some extra coin out of Nintendo. Bill Gates probably put them up to this!
when will they investigate the RIAA?
I always figured that Nintendo were the good guys, compared to Sega/Sony/and now MS.
and you'll get modded up as funny to
for the no brainer lame ass comment
If Nintendo sells units for more money in a country with less demand, it's illegal? Price-fixing? Nintendo competes in one of the fiercest markets around. *BOGGLE*
<Amanda`> I just went out to the parking lot in my bathrobe to exchange warez CDs.
Nintendo has only loved the pocketbooks of their users, nothing more.
People have already mentioned their price fixing the NES, but how about their security chips and their rabid hate of Tengen? And then there's the Game Genie and how Nintendo did their best to put Camerica out of business.
Nintendo just ain't cool when it comes to anything that lowers their share of pocketbook abuse. Always has been, always will be.
If you could be told what you can see or read, then it follows that you could be told what to say or think - BoC
You're supposed to hate any company that engages in price-fixing cartels, as this is anti-competitive and illegal.
Of course, this is slashdot.
Serious. You havent you seen many "love- stories" about Microsoft and Nintendo here latly have you?
Melius mori in libertate quam vivere in servitute.
Seriously, this is just an extention of status quo for nintendo. I remember when they lost a class-action suit for price fixing back in the 8-bit days.
It's recently been status quo for the entertainment industry as well. consider that the Labels just got hit for price fixing in the last few years too...
A company should be allowed to charge whatever it want's for it's products. No one is forced to buy.
Tony
hard core geek-ware
Normally it's the UK that has the highest prices in Europe.
But the period they were fined for was only 1991-1998. That still leaves the past 4 years to be accounted for.
But then again Gamecube games are still a lot cheaper than X-box and PS2 games if you know where to shop so maybe they have learnt their lesson.
Nintendo seems to be having problems as of late. The Xbox is outselling the GameCube in the US, even with Super Mario Sunshine out now (That being said, I don't think SMS is a very good Mario game). This lawsuit is surely not going to help. Hopefully Metroid and Zelda will increase sales. Where's Mario Kart GCN?!
I'm on top of my game like I'm standin' on Xbox.
They will fine the DVD consortium for region coding. I'm sure that it's cheaper to buy american DVDs than the the euro ones that are likely released much later.
...or 1430000 extra lives! Game over!
It seems like it has more to do with the open trade policies within the EU than it does with Nintendo.
End of Line.
Because of this Nintendo will have to cut prices across the board. The red potion in the original Zelda will only cost 20, and you only need 80 coins in Super Mario Bros. to get an extra life.
It's just a symptom of a much bigger problem. The global economy has reduced the importance of national laws. If you don't like the laws in the country where you operate, moving has never been easier. Child labor laws? Move to Cambodia. So it makes my day just a bit brigher when I see them getting smacked down for it. But, I would much prefer to see a $143 billion instead of million. That would get their attention
To make laws that man cannot, and will not obey, serves to bring all law into contempt.
--E.C. Stanton
I don't see why the EU get's to benefit from screwing consumers. Why not let the consumers screw the company by not buying the product, or ordering it from somewhere else, or otherwise avoiding the price gouging? Is the EU going to give the money back to Germany and the Netherlands to the consumers who got ripped off? I don't see how the EU is doing the right thing.
When is a market unfair? When is it unfair for a company to set a price for their products? If I offer to sell you a video game for $50 or for $100, then isn't it just a private transaction between the two of us?
Now, if I want to sell that game to someone in Britain for $50, and someone in Germany for $100, is there something wrong with that? After all, can't the German customer just call up someone in Britain and have them buy it for him and ship it to Germany, and pay him the $50 plus a bit for his troubles?
Perhaps the problem here isn't Nintendo. Perhaps the problem is government laws that prevent the free exchange of goods across borders, or government fees and taxes that discourage cross-border trade, and enable companies like Nintendo to pull stunts like this.
Mike van Lammeren
It will challenge your head, your brain, and your mind.
Just remember, if it's a big corporation, default to hating it. Just makes life much easier. For example:
your friend: Did you hear that big corporation X is polluting the environment, killing babies, supporting Al Qaeda, and paying third world labor in lint balls?
your reaction: Eh, I already hated them
Then you can go about your day unphased by their crimes. Much easier that way.
This sig has been temporarily disconnected or is no longer in service
Probably $143 million worth...
"And like that
The lead attorney for Nintendo, upon hearing the verdict, angrily tried shutting off the power to the courtroom while screaming "FUCK THAT SHIT MAN, THE FUCKING SYSTEM CHEATS! I HAD THIS SUIT WON".
Other attorneys on the case were quoted as saying that the lead attorney had a copy of the trial saved on a memory card, and would try his closing arguments over and over again until he won.
This is what the audio/video industry needs ...
- certain DVD players also sold in Europe have been priced 4 times the US price (Technics DVD-A10, 399$ vs 1500 EUR !)
- typical US gear costs twice the price here
- some Belgian speaker designer asks 7500$ for a speaker based on a German DIY kit which only costs only 500 EUR
- the Belgian and Dutch importers add 30% to the recommended German retail price for a lot of equipment
This is an important less, corporate boys and girls.
If you're fixing prices, then you'd better make sure that you charge the same high price in every single country in the EU.
Got that?
You can still catch flak for uniformly high pricing, though, but it beats this kind of bad press and fine crap.
"Provided by the management for your protection."
DVD's have a built-in way to enforce trade restrictions: region encoding. Of course, film distributors will claim it's about release dates or other such crap; but in reality, region encoding was always intended as an anti-free trade measure.
The distributors want to extract as much money as they can from each market: while they can easily get $18 for a DVD in the US, that would be way too high in China.
The way to scuttle this is to reform copyright to be free trade- and fair use-friendly: demand that, as a condition of receiving copyright protection, distributors not cripple the product in any way---no "copy protection," no region encoding, etc.---and allow users to buy and sell and resell them as they please, and to make copies for archival purposes or for limited distribution to friends. (Note: Your 10,000 closest friends on Gnutella don't count.)
OTOH, if the distributors want to put in anti-free trade or anti-fair use measures, they obviously don't need copyright protection. (LOL)
The point of this proposal is simply to shift the balance back to the center, away from the veritable power orgy for content owners that exists today. Reasonable people realize that copyright, patent, and trademark protections exist for a reason; reasonable people do not believe that these protections should come at the expense of all liberty for users.
Cheers,
Kyle
[ home ]
not that i am a big fan of nintendo, how could the EU enforce a rule that the price of anything sold has to be the same across the EU states. In that article they compare the price of cubes sold in Britain & Germany. Does this essentially mean that the services (shipping, handling etc)would invariably cost me the same in germany & Britan ?
More over, there could always be the additional language barrier & translation costs for the cubes or any other product. Wouldnt it be a valid argument for price hike from nintendos side ? (although 65% is a little too much)
Siggy Say, Siggy Do
charge what they want? If its overpriced, tehres one simple answer: dont buy it. Its not as tho these products mentioned (anything by nintendo, Levi, Microsoft etc) have anything to do with practical and normal living needs?!?! Now, if this was against a supermarket or a foodgoods seller, then fine, but in this case i dont agree.
Firstly, its their product, why cant they decide how much they want to charge? The value is only that of what people are willing to pay, people stop paying and the product obviously isnt worth what they are asking.
Secondly, as i said before, its not a vital product. All of these things are luxuries, and definatly things we can live without.
Priorities people, want to go after a price fixer? Then go after the Pharmacuetical Industry who definatly fixes prices! That sort of battle would benifit more people than this.
Coincidentally, I've just finished reading this book, which gets into the original court case in the US. It's a very interesting read (although it's not so good at the very end). Unfortunately, I think it may be out of print.
Reality is defined by the maddest person in the room
Nintendo says that they were "more victim than villain" of price fixing.
Exactly how did they arrive at that conclusion? Is not making more money an overall goal of the company that they'd be happy about? Sell your stock now!
The global economy is a great thing until you feel it locally.
That has to be the funniest shit I've read in hours. Bravo!!! No matter what you think of the series, that Elite force video game is pretty rockin....
(Score: -1, Troll)?
.
Maybe flamebait or redundant
The music industry repeatedly is investigated for price fixing and other unfair, illegal and immoral business practices.
the preceding comment is my own and in no way reflects the opinion of the Joint Chiefs of Staff
No matter how much the EU tries to, its countries are not the same.
You have avg income differences, and most important consumer diffences and market penetration differences.
Prices should not be the same in each country, as these conditions are not the same.
If i live in Germany and i see prices are cheaper in the uk i simply buy in the uk, that is what online stores are for. Granted, this would also make the price difference pointless but i bet that online sales for nintendo games (bought mostly by parents) is less than 5%
The number is EUR 149 million.
Read the press release from the European Commission.
Some facts:
And so on and so on. You can find more facts about it at the rather appallingly designed Rip-off Britain website.
Avantslash - View Slashdot cleanly on your mobile phone.
A company should be allowed to charge whatever it want's for it's products. No one is forced to buy.
Nintendo has an effective monopoly on sub-$100 handheld video game systems (a Pocket PC currently doesn't count because it's at least three times as expensive as a GBA) in the United States, and this monopoly drove the development of the Afterburner light kit from Triton Labs.
The following doesn't exactly apply to Nintendo Co Ltd and its worldwide subsidiaries, but try owning a home in an industrialized country for three months without paying a local utility monopoly such as the electric power company. Pretty much the most prominent people to pull this off are the Amish.
Will I retire or break 10K?
Fair enough, the stories don't have much shelf life (why don't we go kill some pre-teen beauty pagent winner and give them something to talk about)
But nowadays, it seems there are so many that they just keep coming out of the woodwork.
To make laws that man cannot, and will not obey, serves to bring all law into contempt.
--E.C. Stanton
Coins exploding from his body Sonic the Hedgehog style?
No, that's rings, and that's when you get hit, not when you die (as "explode" in the blurb implied). Coins come off a dying player in Super Smash Bros. Melee.
Will I retire or break 10K?
Is this the same as how GBAs in the US are $100 yet you can import them for $63? Of course, I haven't checked US GBA prices in a while... maybe they're $63 now too, but I doubt it...
Luke-Jr
I think it will become evident that video games are part of the art of this age. In that context it is baffling that Europe has little influence in the current artistic project. Europe speaks better English and has longer historical ties to the United States, yet has eschewed participating in an industry whose size now is greater than that of the movie industry. Japanese, not European artists, are in their games and anime successfully fusing both Western and Eastern culture into the new world youth culture.
Fines for unfair trade practices do nothing to address the real problem, which is that Europe is not producing for itself its own fresh supply of culture. How is this possible given Europe's history, tradition, and diversity?
There is imbalance here which is not good for humanity. Social welfare systems cannot be the ultimate goal, statis cannot be the objective. The argument must be that in comfort creativity and discovery are enhanced. We must find a way to escape the paradox that Orson Welles stated when he said, "In Switzerland they had brotherly love, 500 years of democracy and peace and what did that produce? The cuckoo clock."
Now if only the EU could do this with Microsoft The are doing this to Microsoft "Microsoft as well as interested third parties will have the opportunity to present their positions at a formal hearing," Monti told reporters.
Does anyone know where "Interested third parties" can get involved?
Any sufficiently advanced libertarian utopia is indistinguishable from government.
For example (and for argument's sake) why would a person spend $60 for a game when they can get the exact same game for PS2 for $40? (Notwithstanding the difference in the cost of the hardware - which at roughly $50 evens out at about 3 games. Who only ever buys 3 games for a console?) You'd think that this scenario would simply hurt sales, and not increase profit. Unless of course, they only care about short term gain and higher profit margins and not increasing market share. Makes sense in the short term, but kills you in the long term.
Sounds to me that not only is Nintendo guilty of price fixing, but that they're guilty of having a somewhat flawed business model.
Hopefully they won't try this kind of BS again. Nintendo has existed for over 100 years and, as far as large media companies go, has been very ethical.
Computer Science is no more about computers than astronomy is about telescopes. --E. W. Dijkstra
.. that the suit originally started off for $1, but the prosecutors were later discovered to have warped to World 3-1, and jumped repeatedly on a turtle as he descended some stairs.
Now if only the EU could do this with Microsoft
They are doing this to Microsoft
"Microsoft as well as interested third parties will have the opportunity to present their positions at a formal hearing," Monti told reporters.
Does anyone know where "Interested third parties" can get involved?
Any sufficiently advanced libertarian utopia is indistinguishable from government.
Luigi: "Yessah, to make-eh some extra gold coins, eh!"
Princess: "Oh, dear."
Imagine the Creator as a stand up commedian - and at once the world becomes explicable. -Mencken
The Register is carrying another story here with evidence that Nintendo expected a far smaller fine - around 50M. An interesting read that'll make you think twice before publishing MSWord docs to all and sundry :-)
Try NetBSD... safe,straightforward,useful.
Obligatory link to The Expurgation of Maniac Mansion for the Nintendo Entertainment System
Behold, evil!
Belief is the currency of delusion.
And cute spanish women to boot? Im shipping out!!!
All Troll + "offtopic" mods are meta moderated as "Unfair", because you abused the system.
What strikes me is that there is something of a double standard in play here. The EU makes no attempts to make sure that it costs the same amount to advertise a product in different EU markets, or that it costs the same amount to get a product on the shelves in each, but it does use fines such as this one to make sure that a producer can't charge different prices for the same item in different places.
As far as I can tell, this will tend to make profit margins necessarily higher in some EU markets than in others, with the result that either all markets will get more expensive, or that producers will stop selling in some markets.
In other words, if it costs Nintendo more to operate in the Germany than in the UK, and if they are prohibited by law from charging higher prices in Germany than in the UK, then their only options are a.) to not sell their products in Germany at all, or b.) to charge higher prices for their products in the UK.
If the goal of this legislation is to stiff the Brits or to reduce the number of products the Germans have to choose from, it would seem to be working quite well, but if it's goal is to make the product cheap everywhere, it's hard to see how it could possibly succeed.
Microsoft is evil. Sony is part of the MPAA. And now Nintendo is doing bad things.
I just want to know who I can buy console from and not feel guilty. Where is Atari when you need them?
Publicly traded corporations have one overriding goal: increase shareholder value. And since they are a non-human legal entity they have no inherent moral tendencies to keep watch over their behavior. Therefore, they never "feel bad" when they act outside the law or society's mores. This is perfectly illustrated with the way companies view fines and lawsuits as "costs of business" that can fit into their accounting books. If by polluting illegally for 10 years, a company saves 200 million over proper disposal, but then pays a 100 million dollar fine, the books show that as 100 million dollars in the plus column.
In order for companies to start obeying the law, the penalties need to make it more expensive to break the law then to follow it.
Everywhere I go, video games cost the same. I've never seen them go down in price until they hit the "we need to get rid of this junk" bins. Why isn't this price fixing? Or is it? Sure looks that way to me.
2002-10-30 16:37:04 European Commission Fines Nintendo (articles,news) (rejected)
Here's the link I referred to which is straight from the horses mouth.
Wait, I think I figured it out! I forgot to bash Microsoft and the RIAA in my post even though they have nothing to do with the story. When I saw the rejected status, I instantly thought it might be that idiot, Michael who only does reposts, crap very few people care about, and anti monopoly postings. Hmm, look who posted this article.
-Lucas
I didn't even know I was this interested in console history. I can't stop reading, this is quite fascinating. Thanks for the link.
put the what in the where?
Comment removed based on user account deletion
Okay, Nintendo screwed their customers with price fixing. What I want to know is who's gonna be on the recieving end of that 146,000,000?
/*drunk.. fix later*/
I think that this is the real advantage of the Euro. It can really help to point out price-fixing as prices on anything can vary greatly across Europe.
Nintendo has already changed it's method of distribution YEARS ago. That is why they are appealing.
The EU contacted NOE, and they cooperated and fixed the problems, now the EU is back stabbing them.
--- From a maining list I am on.... On Tuesday, September 24, 2002, Home Depot Canada sent a small army of private security guards backed by a small army of Toronto police to forcibly evict about 125 people from a homeless encampment on their unused property in downtown Toronto, Canada. Home Depot needs to be held in account for its actions. Due to the urgency and seriousness of this matter, please respond immediately to our international call for solidarity and action against Home Depot. -- While the property is theirs, and really they can do what they wish to it. Using security guards and cops to toss homeless people off your unused property with no notice, with winter coming is somewhat evil. This is all the more evil as there is a housing crisis in Toronto, and winter is coming.
I make a reasonable middle-class wage by going to work and not spamming blogs with scams.
"Now if only the EU could do this with Microsoft, Levi Strauss and the MPAA members..."
Yeah but why would they? Those companies are not Asian, they are the "good guys" not the "bad" guys.
It is not a logical statement, it is a comparison of costs. Nintendo is being criticized because they cost the consumer more than they otherwise would spend through price fixing. However, this amount of money is miniscule by comparison to the amount of money stolen by the government. The poster is not saying breaking a corporation breaking a law is ok because his taxes are too high. He doesn't even care about the law, except he believes rightly the law is there to protect his interests. In this case, the cost of Nintendo's behavior to him is trivial in comparison to the government. It is not a logical statement, it is a comparsion based on his personal preferences. Thus, there is no logical fallicy since logic was not employed.
Nintendo doesn't really cost you anything if you do not buy their products. A penny saved is a penny earned. However, every penny you earn will be taxed by the government. Your only recourse NOT to have the government cost you money is simply not to work. Or break the law, which is what people do now.
Also, free trade, by its very definition does not involve rules. There will always be free trade, regardless of what you or anyone else claims. People will deal with the rules as long as they aren't a big deal, but as soon as they are, they say fuck it. Heroin may be completely illega, trade in diacetylmorphine is completely prohibited in the United States. Nevertheless, I can walk out my front door and find a drug dealer in less than 20 minutes who will gladly sell me a $20 bag of the h-bomb.
What really is a nonsequitor is that laws and rules always create 100% compliance. Rules don't mean a damn thing. People will do what they want when they want no matter what. Threats, intimidation, gulags, concentration camps, its all been tried and doesn't work.
I don't read or respond to AC posts
Not because they went after Nintendo, but it validated that their actually a govermental body that can actually do something. As for the Levi's comment, I like Eddie Bauer jeans anyway.
Yes Francis, the world has gone crazy.
Anyone here notice yet that the popular opinion on this discussion is that who does the damned EU think they are to regulate how Nintendo can sell their product; whereas on SuSe Linux will run Microsoft Office, it's all about how MS is an evil monopoly that needs to be regulated?
/. crowd loves busting on Evil Devil-Worshipping MS but will defend to the death their Beloved Happy Shiny NES, even though the actual differences in behavior might be quite slim.
First, some information. The decision wasn't made based on how Nintendo wants to set prices. All you free-traders are right - they can do whatever they want. However, the laws they admitted to breaking concerned their price-fixing, not their pricing, ie their strong-arm tactics in preventing distributors from selling their products in countries where Nintendo wanted to price them higher. This is exactly not free-trade.
A couple of thoughts:
(1) There are completely different people making the arguments. None of the free-traders are hanging out on the SuSe Linux discussion, but they're coming out in numbers here.
(2) The
(3) ?
That's what I love about slashdot. The diversity of the uninformed opinions... =)
I guarantee you get a lot more return for your money from the government (which isn't hell-bent on taking off a maximal ROI from every taxpayer dollar it collects) than you do from a corporation, which always wants its 15%+ profit.
Or don't you like roads, electrical grids, and all that other good infrastructure and all those wonderful services? Me, personally, I like paying taxes.
Coincidentally enough, I don't think people hate corporations for the same reasons they hate governments. It's not about the money corporations take away, it's the exploitation without accountability (or transparency) -- unless you are a shareholder, you cannot vote a corrupt CEO out of office. I am acutely aware of this paradigm, because there are US politicians who somehow directly affect my life and whom I would dearly love to vote out of office, and I'm not a US citizen.
While I agree that Nintendo's price-fixing is a non-issue as issues go, it's still worth a weather eye, much as many other things are. I'd hate to be serious and uptight all the time.
I'm not a geek, I'm just a clever script.
Sheesh people...
Not that I agree with it, but the Big Automakers ban people from buying their cars in Canada and re-selling them in the US at a hefty profit.
Actually, buyers of the BMW Mini had to sign a contract that they wouldn't do that!
Actually you have this backwards...demand does not set prices, supply does...consumers are 'price takers'...in other words they accept the prices they are offered and decide on how many (if any) at the given price. Higher demand indicates lower prices, due to economies of scale, lower demand means the opposite. Nintendo got in trouble here because they manipulated their position as a monopolist... they attempted to capture monopoly profits by artificially constraining supply (the same way diamond miners do)... this is not unusual in itself, companies set different prices for different markets all te time (Microsoft in Australia for ex.). It becommes illegial when a company manipulates prices within a single market...you wouldn't expect to pay less for a computer in California than you would in NY would you (taxes exclusive)...
Bad spellers of the world untie!
So then how does the EU allow region coding on DVDs to exist?
Having a 50% penalty on illegal gains is actually an enducement to break the law.
Actually, no, it would be a pretty serious penalty when imposed on the personal wealth of the executives making the decisions but calculated on the corporate gain from the illegal scheme. If International Widgets fixes prices and reaps a revenue windfall of $500M, then Liesure Larry, the exec responsible for it, would be fined $250M personally, even if he personally didn't make anything other than his usual salary and bonuses.
Sure, the corporation profits on this deal, but the people responsible for it pay very heavy prices out of their own pockets. If you want to eliminate that, make it 100% damages.
The whole point here is that the *people* engineering these schemes need to be accountable. Fining the corporation is pointless -- it just encourages the execs to be more careful and to raise their prices to cover future potential penalties.
My government takes 55% of my income EVERY year. Compared to that, Nintendo isn't even a minor concern.
Lucky bastard. My goverment takes 47% of my income every year, then Nintendo comes along and takes the rest!
Damn you Nintendo, damn you to hell!
This is double-screwy and quite hypocritical when you consider the artificial EU VAT TAX THAT IS NOTHING MORE THAN GOVERNMENT-MANDATED PRICE FIXING. But I digress. Can't wait till they pull this one on the drug companies -notorious for variable pricing.
"God fights on the side with the best artillery." - Napoleon, Marshal of France - speaking truth to power
Pharmaceutical companies spend billions of dollars a year on research, development, and testing. Forcing them to lower their sources of income would mean they spend less on this, and thus would harm the people more than benefit them because of the unavailability of drugs.
... yet those who benefit from government granted monopoly regimes, like Patents, manage to convince people it is okay anyway. Inventors (incluiding pharamceutical companies) can make a perfectly fine living competing against others selling an identical product (who cares if the competitor didn't invent it first and just copied the invention, invented it independently, or did invent it first but lost the footrace to the pantent office? None of that stops the inventor from marketing and selling their product, indeed the only thing the competition will insure is that the market price is a fair one).
... achieving all the downside and little of the upside.
Bullshit.
1) Pharmaceutical companies exaggerate the amount they spend on research, often vastly so, as a club to use whenever patent reform is proposed (or discussed in government circles). Much of that expense isn't R&D related at all, it consists of normal, non-research-related costs which through the magic of accounting have been transformed into R&D Costs.
2) Much, in some cases most, of the money funding research comes from public funds (grants, generally paid for by taxpayers) and private donations (been to any AIDS benefits lately?), as well as the time, resources, and materials of publicly funded educational institutions (Universities, Government research labs, etc). It is an appalling outrage that the products of such contributions are then privately patented and sold back to the very contributors at inflated monopoly prices.
3) It is a myth that an inventor requires a monopoly in order to make money on their invention. Ironicly, it is an anti-freemarket myth that flies in the face of virtually all free market economic data and theory
4) There are a number of other methods for financing R&D that are more effecient than the blanket granting of 20-year monopolies to private interests. Indeed, we use several of these and still give them their monopolies
5) Selling AIDS medication for $20,000/year that costs $200/year to make does not benefit the patient (and in that example most of the money financing the research came from public funds to begin with), it only benefits the pharamceutical monopolist.
6) Monopolies are virtually by definition "price fixing," as only one entity can sell the item and are thus free to "fix" the price wherever they would like. When they fix it too low it is called "dumping" (though that isn't the only example of dumping, it certainly is one, e.g. Microsoft and Internet Explorer or Windows Media Player), when they fix it too high it is called "fixing" or "gouging", but the reality is a monopoly, whether achieved by government fiat (Pharmaceutical Patents), through predatory anti-competative business practices (Microsoft), simply because one is the only one to offer a particular product or serve a particular niche (Power and Gas companies in some locales), or for whatever reason, a monopoly is always 'fixing' a price, as there is no competition to otherwise affect and determine pricing. Maybe, if one is lucky (or has good government oversight) the price will be fixed "fairly," but fair or not, the price is definitely fixed.
No free market, no non-fixed prices.
It is just that we as a society have, foolishly, choses to hone rather large blindspots with respect to much of the price fixing that goes on, because we either charish, or do not question, many of the monopolies that surround us (particularly those which exist through government fiat via Patent and Copyright law).
The Future of Human Evolution: Autonomy
Yes, the UK does generally suffer from retail rip-off compared with the rest of the European Union, but not in this particular case. Surprised me too. Here's the quote from the EC press release:
UK by far the cheapest country
The investigation showed that during the seven-year period price differences in the European Economic Area (EEA) EU plus Norway, Iceland and Liechtenstein -- were frequent and significant. The UK usually had the lowest prices by far, which understandably tempted traders into re-exporting cheap goods to high-price countries.
The most striking price differences were observed in early 1996, when certain Nintendo products were up to 65% cheaper in the UK when compared with the Netherlands and Germany. They were also more affordable than in Spain (up to 67% more expensive than the UK), Italy (54%) and Sweden (39%). The difference narrowed but remained significant in 1997, when the UK price for all N64 game consoles and game cartridges was 33% lower (in October) than everywhere else in the EEA.
When did consumers start believing that they had no choice? Just because Nintendo wants to charge crazy prices doesn't mean I have to pay them. Yes, I don't get a gamecube then. But so what! I made my point. I used my wallet as my voice. Believe me, if enough of us stop buying games they will hear us.
By the way. I've never owned a console. I wanted to buy one so that I wouldn't have to upgrade my computer just to play some modern games reliably.
I bought a used dreamcast for 50 dollars at GameStop. The games are usually around 10 dollars and they look great. My main concern was the cost of the games - No way am I going to spend 50 bucks on a single game - and I didn't.
Considering they stole the game Double Dragon from a kid when he submitted it to them to try and get a job.
that causes companies to go and lay off their employee's in moves like this.
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The Ninentendo case is an example of price discrimination not price fixing.
Price discrimination is when a single producer charges different customes different prices. Price fixing is when different producers agree to sell to all customers for the same price.
What followes is some detail on each and then some argumentation for why the ethical case against price discrimination generally is weak, without adressing the Nintendo case particularly.
Price fixing is an instance of collusion, where ostensibly competing producers negotiate an agreement to restrict price competetion between themselves. That is, producers agree not to sell their product for below some specified amount. The purpose of the agreement is to increase sales profits by rasing sales prices. Note that such agreements are always accompanied by another agreement about how producers divide up the market. Sometimes producers carve up the market geographically. For example, "You sell in Michigan and I'll sell in Ohio." Sometimes producers carve up the market by number of sales. "You won't sell more than x billion barrels of oil and I won't either."
OPEC is the quintessential example of a price fixing organization. Price fixing is its sole and explicit purpose. (OPEC can do this because it is an organization of governments, and there exists no super-governmental body to place on governments the same rules by which those nations govern their citizens.)
Price discrimination, on the other hand, is a pricing strategy of a lone seller for raising profits on sales without organizing agreements with his competitors. For each buyer, the seller attempts to negotiate the maximum price that buyer will pay. For the seller, this stragy works to raise net sales income above what would be obtained with a one-price-for-all strategy.
The moral case against is price discrimination is pretty weak for these reasons:
-Because richer customers are willing to pay more, in practice price discimination amounts to giving poorer customers a break on price. It places the costs of production more heavely on those who can best afford them. If you look at Nintendo's pricing scheme, I would predict you find that Nintendo charged more in richer countries and less in poorer countries.
-Most people don't regard price discrimination as unethical. There are plenty of examples which demonstrate how this is cool with most people. Like Priceline's "Name your own price". Or the bazaar, where buyers and sellers haggle over prices, the buyer attempting to determine the lowest price at which the seller will part with a good and the seller trying to find the highest price which the buyer is willing to pay. There is no guarantee or even an expectation that such a system will result in the same price for each customer, and that's just cool with everyone.
-With progressive taxation, tax payers are assessed different fees according to their ability to pay. With price discrimination, buyers pay different fees according to their willingness to pay. Goverments make the "Different people pay different amounts" argument in the case of taxation. However, the argue against "different people pay different amounts" in the case of private sales. The reason for the contradictory approaches is that with taxation, goverment is as the recipient of tax revenues adopts the strategy which maximizes those revenues. In the case of corporate sales, they have little such insentive. My point here is not that one or the other is eithically correct, but that it is difficult to make the ethical case for one as you engage in the other.
With price discrimination, the rich lose out becasue sellers can exploit their willingness to pay more than the poor. Mario Monte stands for their interets here.
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In spite of the judgement against them many years ago, I don't believe that Nintendo has changed their strong arm tactics with retailers in the US since. Hasn't anyone noticed that when there is a big 'sale' on Nintendo boxes that all the retailers in town advertise the *exact same price right down to the penny*? Hmm? That doesn't happen by accident, boys and girls. I know the manager of a local ToysRUs and have listened to the complaints about Nintendo's threats to drop them as a retailer if they attempt to undersell any of their competitors. Once upon a time, there was a federal law enacted known as 'fair trade' that was supposed to protect retailers from aggressive mail order houses. Instead, the manufacturers are using the law to crack the whip on their retailers, preventing them from competing on price/margin in the marketplace. The whole things disgusts me...
Lots of people do not seem to understand what Nintendo has been doing. And of course, if they would have actually read the story... Nintendo is charging different prices in the different EU countries, that is of course perfectly legal. But... Nintendo also used it's reseller cloud to make sure nobody could sell an English console in i.e. The Netherland. They did that by blacklisting resellers who tried this, and thus they kept the prices in a couple of countries artificially high. And THAT is illegal, at least in Europe.
EU is a free market zone. That is nobody can forbid you to buy car, nintendo game, or whatever in a EU country and resell it in another country for Cheaper. Car dealer and Nintendo did. that is why they were fined. they did not respect the law. And we as people see the money back. in form of infrastruture and other stuff. the same way when somebody is fined by the local governement but on EU scale.
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Consider it a tax for ruining words with all those extra 'u's.
Okay, I see there are already a bunch of (pro|anti)-(free trade|WTO|EU|Nintendo) posts here, most of them without a clear understanding of the situation. I guess the headline made it seem like the EU was dictating what Nintendo could charge. That is false. The ruling was about Nintendo stopping third-party distributors from importing games from countries where they were cheaper. To clarify:
1) The ruling is *pro*-free trade, as it's basically punishing Nintendo for stopping import-export within the EU.
2) Nintendo *is* alloweed to charge whatever it wants, and charge different prices in different countries. What they cannot do is stop people or companies from re-selling to countries where the products are more expensive.
3) The ruling is based on actions in the mid-90's. It does not have anything to do with the market currently, I think things have changed since then. Anyone from Europe care to comment?
So flame on, but please flame on based on facts, not false statements.
Having moved from Australia to the US -- all my legally purchased DVDs from Australia are useless in the US. Until I get mad and decode them using a software product for "backing them up"...
And his makes them different from who? Every corporation (save a few oddball nonprofits) is in the business of making money. That's the whole point. Corporations will also defend their position in the marketplace and do their best to weed out the weaker competitors. That has always been the case.
Boobies never hurt anyone. - Sherry Glaser.
If I legally make a billion dollars, why should I be forced to give it all to the governement? Why can't I keep the money I made?
I have nothing against paying my fair share of taxes, but punishing (which is what you are advocating) people because they make obscene amounts of money is 100% grade-AAA horseshit.
Boobies never hurt anyone. - Sherry Glaser.
Criminals suck.
I agree... sometimes. It depends on the law in question, doesn't it? What if the government made free press illegal? Publishing a newspaper without the consent of the government would then make you a criminal.
The gov't is not a bunch of criminals for taking your money. They are doing things that benefit society with that money.
The notion of "that which benefits society" and the notion of "that which is moral" are equivalent. Furthermore, they aren't always doing things that benefit society with that money, right? The government is composed of fallible humans subject to the corruption that power brings. History is rife with examples of government abuse so that those in control can profit at the expense of private citizens. The principal difference between corporations and government is that corporations do not have the legal right to use deadly force to acheive their goals. Of course, corporations can always bribe government officials. Everyone knows that this happens to this day and it blows holes in your claim that governments are "not a bunch of criminals."
I personally believe that at some level of income, the tax rate for individuals should become 100%.
Two words: class envy. It's getting so old and so tired, yet it will probably never ever go away.
No one person should have a billion dollars, it's impossible for a democaracy to exist when people do.
"Democracy" is one of the most abused words in the English language. What happens if 51% of the democracy decides that the 49% should be their slaves? This is the "Tyrrany of the Majority" that Madison wrote about in _The Federalist_.
The economy would still function just fine under this system, since indiviuals could still pool their money by creating corporations.
What's to stop the government from taking control of all corporations if they so decide? Remember, the only reason that they'd do such a thing would be for "the benefit of society."
I don't make the rules. I just make fun of them.
Yearly average spent on limes in the US : $50
Yup, the lime bacardi breezer is very tasty. But at £3.20 a bottle (eep!) it adds up very quickly. Not that I drink 2 bottles a day...
It's only £1.40 at the off-license next door to the pub, but the bouncer takes a very harsh view of people going next door :-(
Sure, Nintendo was found guilty and fined for price fixing, but like the music industry - will they just raise the price of every unit just as a big middle finger to every consumer?
A lot of people here are writing "why can't they charge the same across Europe". THIS IS NOT THE ISSUE.
Nintendo have been found to have formed a cartel with their distributors - who have also been fined a LOT of money. The EU decided that the distributors along with Nintendo had fixed prices among themselves. This means that there is no price competition on games (there can't be). This kind of thing happens a lot and a lot of people getted spanked when it happens. The car industry was famous for it for quite a while.
Apart from that I think fining the Big N is rediculous. I was an owner of a SNES and am the owner of an N64, GBA and Gamecube. Where does 150 million go??? Well - it comes from Nintendo so I guess as a paying customer I'll have to help Nintendo recoup costs.
There must be more elegant solutions than this - if the consumer was ripped then the consumer should be repaid. Not the EU. Free games!
"None of this shit works" -W.Shatner
EU cares about discrimination inside EU. All EU within one region code = no problem. Personally I would wish they did though. I can live with CSS but I really hate those region codes.
Kjella
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it's not food, water, shelter, medicine, or anything else essential to people's lives.
I knew that. Let me try a better example: medicine. If a pharma company owns the patent on a drug that would save the lives of millions of people, would it be morally correct for the company to say "give us all your money or die"?
(without bonus because it's tangential)
Will I retire or break 10K?
From the little I remember of my economics classes, can't the "price fixing" of the sort that is at issue here (charging one set of consumers one price, charging another set another, higher, price, and coupling that system with some method of separating the two groups) be a good thing? (By good thing, I mean good thing for the wee, downtrodden folks -- which here appear to be the British, and not the Germans.) I remember the rationale being something like this: assume the market will bear out a certain amount of profit for me. I can either capture that by charging the same amount to everyone, or by charging folks varying prices according to their ability/willingness to pay. The latter method will allow more people who has less money to spend to buy my products, and the expense of screwing those who've got more money to do so. Hardcover/softcover books are the classic way of doing this. You market hardcover first to capture the higher spending folks, who are willing to pay a premium to get the books faster (and in better shape), then follow up with softcover to capture the cheapies. On a related note, don't the Finns give out traffic tickets like this? The rate you pay isn't flat, but varies according to your ability to pay? Likewise, this interest in "fairness" underlies the U.S.'s graduated income tax. One can debate the fairness, certainly, but there are at least good points to be made on both sides.
Nintendo's lead attorney walked up to the judge prior to the start of the trial and then walked up, up, up, left, right, left, right, down, down, left, right, and down.
I don't know about you guys but I thought it was quite funny that name of the EU spokesman is Mario...
Are they going to tax my Super Mario Brothers I theme song ringtones?! I'll have to run the speaker output into my collarbone so that only I can hear it!
Could this be a warning shot towards MS and the antitrust case?
/. Where the truth
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....and used the inflated price everywhere, so no-one is excluded.
I haven't seen a Nintendo console priced at over AU$500 (The original Nintendo Entertainment System may have been when first released, but I was too young to remember). I do remember the price of the SNES being AU$299 when first released. About 3-4 years later, we start to see these 'next-gen' consoles (Sega Saturn and Sony PlayStation) initially sell for AU$1000!!! Eventually, the price gradually lowered to AU$800 until 1997, when Nintendo released the N64 for AU$399, and an instantaneous price drop in the Saturn and PlaySation occured, coincidentally matching the N64 console price. 5 years later, we see almost the same trends. We have Sony selling their PlayStation2 for near AU$800, and hardly considered any major price drops until The GameCube was announced to be released for AU$330 (AU$70 less than expected). Microsoft then followed suite, by lowering it's Xbox console to AU$399, and a month later, Sony decides "Let's try AU$500"
Of course, Sony wasn't the only guilty party, but they have pulled this stunt twice and seemed like the major offender.
I guess the tactic would be classed as "Early start, big profits. Use those big profits to thwart competition later" Mind you, their hype tactic worked pretty well, too.
Why does everyone seem to forget that these charges were brought up against Nintendo back in the late 80's and early 90's?
These are old charges that have FINALLY been punished?
Nintendo was able to get away with some of these business practices when they were the only game in town, but have become more and more agressive with pricing with each passing system.
I hear comments such as "They deserve this" or "they'll never change" and it makes me wonder why people don't realize that Sony and Microsoft have been doing the same thing just as long as Nintendo, if not longer.
I guess it's okay to overprice CDs and Operating Systems, but not video games? It's okay to make exclusive deals with retailers if you sell major electronics or software, but if you are a retail outlet selling video game systems it's not okay?
Nintendo was guilty of those things, and is probably still guilty even if to a lesser degree today. But taking one look around I see the things Nintendo used to do still being done by other companies, and in many cases it's much worse.
I for one hated Nintendo during their 8 bit days for some of the things they were known for. Over the years I've seen them mature as a company and I've grown to respect them. Sure, they fixed prices, they strong-armed retailers to only carry Nintendo systems, and they agressively fought to keep unliscensed games off of retailer's shelves. But they've shown a strong commitment to gamers (their core costomers) and an undying talent for dishing out great games. And, their system is cheaper than their competitors. In my book, Nintendo has become a very respectable company.
As for the exclusive deals and other such things, I'm not saying they wouldn't try that today. I think everyone would, but the competition now days is too stiff to be able to get away with it for long.
As for unliscensed developers making games, that hasn't happened for ANY system in a very long time. I don't think Nintendo had anything to do with that.
"Everything you know is wrong. (And stupid.)"
Moderation Totals: Wrong=2, Stupid=3, Total=5.
The slap on the wrist is not for charging uniformly high prices! It is for threatening dealers that undercut a preset Nintendo margin with having their supplies cut off.
This is ANTI FREE TRADE.
of any company to prosecute, i cant believe their prosecuting nintendo. Its a good thing that all nintendo isn't specifically tied together. (NCL, NOA NOE)
"Martha Stewart can lick my Scrotum......do i have a scrotum?" -- Sharon Osbourne
Wow, I just had to throw in my two cents here, because you are grossly misinformed.
a n.htm ) says 325,000 DKR for a basic model 75 which is approximately 43,740 Euros or 27,636 British Pounds.
2 /~jsp/model_75_pricelist.jsp where prices range from 17,000 to 25,000 British Pounds for a top of the line model.
A quick look at a randomly selected Rover dealer in Denmark ( http://www.rover.dk/newsite/r75/prisliste_r75_sed
For comparison see http://www.mg-rover.com/content/Rover/en_GB/Rover
I don't know where you get your prices, but I'd appreciate it if you could recommend me a dealer.
I imagine this comes from the publisher. Sure, you don't HAVE to sell it at our suggested price (That would be illegal), we'll just choose not to sell you ANY next time if you don't.
Something I've never understood - when the publisher sells the games to the wholesaler, they've already been paid. They make the exact same amount of $ whether the game sells for $10 or $50 at retail - so why do they mandate a retail price? You'd think they would want to sell as many copies to their wholesaler as possible. Isn't the easiest way to do that to allow super-low retail pricing?
1. Lik Sang is prevented (by Microsoft, Nintendo, and others) from selling hardware to make foriegn games work.
2. Nintendo is fined for disallowing systems to cross foriegn boundaries.
So you have no right to play foriegn games, but you have a right to buy foriegn systems. How does this make sense?
if you specialize. Where I'm from, central NJ, there are 2 Home Depots within a 5 miles of each other, and there are still a number of small hardware stores and lumberyards. They survive by being associated with buying cooperatives (ServiceStar, Ace, True Value), offering better customer service, convinience, services, ect. Ironically, the one thing Home Depot has probably killed in the area is Rickel's, a rather poorly managed regional chain (around 150 stores) that closed down several years ago.
Somehow they protect their constituincies free speech rights. Video games don't have any.
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