Nintendo Faces EU Antitrust Fine

Nintendo Faces EU Antitrust Fine

by October 28, 2002

From Gamespot:

European antitrust regulators will fine Japanese video game maker Nintendo and a number of its distributors for sales practices it employed in the mid-1990s.

Nintendo, maker of the popular Game Boy handheld video game console, as well as the Donkey Kong and Pokémon video games, was accused in 2000 of collaborating with distributors to limit cross-border flow of its products in an effort to raise wholesale prices. The EU is expected to take up the matter this week, slapping the world’s number-two video game maker with a fine. The Nintendo settlement is on the commission agenda for Wednesday, EU sources said.

“A formal decision has not yet been received from the European Commission. However, we are aware that a decision is imminent,” a Nintendo spokesman in London said. The size of the fine could not be confirmed. A spokesman for Nintendo of America confirmed that Nintendo had already set aside funds to deal with the fine.

In 2000, the European Commission said it believed Nintendo and seven of its distributors participated in a “cartel-like” arrangement with the aim of partitioning the market and inflating wholesale prices for its consoles and games.

Nintendo has cooperated with the EU from the outset of the investigation, which dates back to 1995. Nintendo no longer operates its European retail channel in this manner.

Demand for Nintendo’s premier product, the GameCube, has tailed off lately in the crucial Japanese and German markets. Still, the company expects to ship 3 million GameCubes to European resellers by year-end. The GameCube is battling with Sony’s market-dominant PlayStation 2 and Microsoft’s Xbox for share in the brutally competitive video game console market.