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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..."
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.
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.
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
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.
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.
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 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.
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.
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
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.
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?
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 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.
"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.
First of all, what mailing list is that, exactly? I'm not sure I believe that's an accurate representation of the facts. Phrases like "small army," "homeless encampment," and "international call for solidarity" make it pretty clear that that's a heavily biased report.
But most importantly, there's nothing evil about this, for several reasons.
1. Home Depot was ordered, by the Ontario Ministry of the Environment, to evict the squatters (not "homeless encampment," but squatters) in November, 2000. The order was based on the premise that the vacant lot was formerly the site of an iron foundry, and not fit for direct human habitation.
2. In December, 2000, Home Depot put flyers all over the squatters' tents saying that they would be clearing the site and asking people to leave. That pretty much blows your "with no notice" theory out of the water.
3. In August, Home Depot actually starting building shelters on the site in preparation for winter. Does that sound evil to you?
There's even more to the story. A good-- and unbiased-- synopsis can be found on the CBC's web site, here.
I write in my journal
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.
Presumably because all of Europe is under one DVD region. The EU's purpose is to handle things between it's different member states, it has no authority over trade between EU states and other non-EU states, or at least not the same level of authority.
This Space Intentionally Left Blank
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.
Ceci n'est pas une signature.
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
Live today, because you never know what tomorrow brings