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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..."
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
when will they investigate the RIAA?
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
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
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.
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.
No - not if no-one's willing to sell it to them. And Nintendo were using their clout with retailers to ensure that no-one was.
That's the entire point of the case.
Cheers,
Ian
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
It seems like it has more to do with the open trade policies within the EU than it does with Nintendo.
You're absolutely right. Unfortunately, it has lately become fashionable to hate corporations. Personally, I find it mind-boggling that someone can hate a corporation but NOT hate government for the same reasons. My government takes 55% of my income EVERY year. Compared to that, Nintendo isn't even a minor concern.
Mike van Lammeren
It will challenge your head, your brain, and your mind.
Lets see, they just lost $143 million dollars? So now, is this going to make them drop the prices in the other countries or raise the prices in the countries that were getting the games at good rates. I wonder.
Occam's razor is the blind faith in the natural selection of least resistance and in universal oversimplification. -- EF
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.
While I know that prices in the UK are usually high, the figures quoted are irrelevant for a simple reason: if you're going to compare, compare against one country, and take things into account. The UK taxes cigarettes far more than most countries do (as I recall) - are taxes an issue? Germany is famous for its beer - is the beer in both situations made by the same company, so that you're having a fair comparison of products? If so, what about shipping costs and so on?
Even here in Canada, you can get a pre-cooked shrimp ring for about $9.99 in BC, $8.99 in Saskatchewan, and $4.99 in New Brunswick, all the same brand. You can also get $10 shrimp rings in New Brunswick from more widely known (i.e. larger, better) brands. Is this because people in BC get 'screwed', or because it costs a lot of money to ship refrigerated shrimp ten thousand kilometers?
If you're going to compare, you have to take more factors than just the price into account - local economy, shipping, VAT, local taxes, and so on. Is the US getting screwed because a BK Whopper costs more there than here? No, we just have cheaper beef, and a lower (but stronger) economy, so prices are less. It's good sense, and sensible economics.
--Dan
No.
Nintendo were leaning on the retailers to ensure that anyone supplying to a cheaper country suddenly got their supply of Nintendo games cut off. There was no-one willing to do this. The second you did, you lost all rights to sell Nintendo stuff.
If people are unable to do so, then that is the case because EU laws/tarrifs/regulations/etc. are the problem.
Exactly the opposite. The EU has laws that enable people to do so and these laws have been used against Nintendo, who were trying to prevent it.
Cheers,
Ian
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.
Nintendo will begin a series of pay cuts and layoffs that will save them $143 million this fiscal year. It won't hurt the bosses who violated anti-trust laws one bit. When they fine corporate robber barons, it always gets passed on to the little guy. They need to throw them in prison.
How ya like dat?
Comment removed based on user account deletion
If I had my mod points, I would probably mod this as a troll.
In response to the grandparent post:
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.
I find it amazing that people don't see the hypocrisy of the positions of the corporations. By people, I assume the general population. Most slashdotters seem to see through the bullshit. I don't understand what it is okay for corporations to exploit lower costs (in most cases standards) of living to produce products for more wealthy consumers in North America, Europe, Japan and Australia, but will do all that they can to stop those wealthy consumers from purchasing items from the same developing countries.Normally, I am a commie pinko bitch, but this time, the I feel the free market would level the playing field. I would love to see corporations undercut by cheaper products (ie products less focussed on branding) from other countries the way they undercut the cost of labour with cheap labour from other parts of the world.
I make a reasonable middle-class wage by going to work and not spamming blogs with scams.
Let me just say, damn I wish I was in your tax bracket. And no I don't feel sorry for you at all. People need to pay taxes so we have things like roads and schools.
I hate monopolies, I love competition. Certain types of price fixing is a crime. Criminals suck. The gov't is not a bunch of criminals for taking your money. They are doing things that benefit society with that money. Ever drive on a public road?
You tax rate is prorably so high because your income is high and whatever country you live in was wise enopugh to institute some sort of progressive tax system. If you don't like having a gov't you should find a place where you can live among fellow anarchists. You can grow your own food and carry a gun everwhere you go, while watching you standard of living go to shit.
I personally believe that at some level of income, the tax rate for individuals should become 100%. No one person should have a billion dollars, it's impossible for a democaracy to exist when people do. The economy would still function just fine under this system, since indiviuals could still pool their money by creating corporations.
Life is too short to proofread.
We are discussing the double standard between the lack of regulation of the price at which a company pays for services and regulation of the price which it charges for its products.
Production is only a small part of this picture. While it is probably true that Nintendo makes games in one place and ships to both the UK and Germany from there, are many other prices which cannot be paid anywhere in the EU and shipped -- the price of advertising on German television stations, the price of getting shelf-space in German stores and so forth.
So again, if you make the only way for Nintendo to recover these costs be raising prices in the UK, they will either do so or they will abandon their interest in selling in Germany (as some other companies have done). In the one case, the British consumer loses, by paying more for the game than he had been paying. In the other case, the German consumer loses by not being able to buy a game he could have bought before.
In neither case does the law benefit the consumer.
You got better than we did. The AG here in Texas just completely blew it when he won our suit against Nintendo. Every Nintendo owner in Texas received a nice shiny new COUPON for $5 off your next PURCHASE of yet another overpriced game.
This is like telling a murderer that they are free to go, but have to give the police a 5-minute warning before the next time they kill someone.
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.
Price discrimination is when a single producer charges different customes different prices.
This is exactly what the MPAA is doing with region coding. I don't know if they'll get slapped for it, ever.
Sigged!
In other words, Nintendo asked distributors in Germany to bear the cost of their marketing and other expenses in Germany instead of buying from distributors in France and the UK and forcing Nintendo to charge higher prices there to recoup the money spent in Germany.
There is always an incentive for a company to have different prices at different places. This is not per se a Bad Thing [tm]. It always happens, because conditions are different in different regions. It may also be neccessary to have different prices just to recover from the different conditions. There is no law in the EU forbidding that. And the EU doesn't have an issue with companies charging different prices.
But to break local monopolies which prevent competition in the retail market because of closed supply chains, the EU looks into enforcing transparent pricing for grossellers and retailers. If Nintendo would have been able to prove, that their pricing was somewhat connected to the costs they had in shipping, advertising and other expenses, they wouldn't have been charged 149m EUR. No, Nintendo was subsidizing prices in some markets at the cost of other markets to gain competitive advantages. This is called price dumping and is forbidden under all sensitive legislation I know of.
With your `solution' in place, Nintendo now has to raise prices in France and the UK, or else stop spending more money in Germany, leaving their distributors there in the lurch.
No. Nintendo would have been forced to charge fair prices in France and the UK and thus not gaining the competitional advantages they got against other local competitors. So German customers are no longer forced to pay for driving companies out of the french or UK market.