Nintendo Fined $143m for Price-Fixing 447
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..."
Good for them (Score:5, Insightful)
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.
Now... (Score:1, Insightful)
So... (Score:5, Insightful)
Nothing new for Nintendo (Score:4, Insightful)
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.
About time... (Score:3, Insightful)
Seems like the EU is coming down on other [bbc.co.uk] business [utopiasprings.com] sectors [eurunion.org] as well. It is about time someone cleaned up the imperfect markets that still prevail in europe.
The construction and music industries would be a good followup.
rubbish (Score:1, Insightful)
Tony
I wonder when... (Score:5, Insightful)
Re:So... (Score:5, Insightful)
Why does the government get to benefit? (Score:3, Insightful)
Re:So... (Score:2, Insightful)
Imagine if consoles were cheaper in Utah, but any Utah resellers were forbidden to ship them out of state.
The EU suffers from too much of this kind of stuff.
Re:So... (Score:5, Insightful)
Not what the ruling's about. The ruling isn't about price per se, it's about controlling the distribution.
What Nintendo were doing was selling a game for x in the UK, and the same game for x+5 in, say, France. Perfectly legal.
The trouble is that they were then trying to prevent French consumers from buying in Britain and importing directly into France. Now, the EU is an internal free-trade area, so controlling imports between member states is a big no-no.
That's the case. Not the price as such, but the control of distribution across member state boundaries.
Cheers,
Ian
Re:So... (Score:2, Insightful)
They were fined for stopping cross border imports inside the EU. The US equivalent would be forbidding shipment between individual states inside the US.
That's not competing, that's avoiding competition.
Re:Rights (Score:4, Insightful)
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
Re:Good for them (Score:5, Insightful)
There's your first problem... you watch 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.
Bad news sells.
Of course you don't hear about the plethora of companies that do good things, act humanely, have scruples, etc... they do exist, and I'd wager they outnumber the enrons of the world.
Bad news sells.
Doesnt make sense (Score:4, Insightful)
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)
Re:Good for them (Score:4, Insightful)
On the contrary, multinationals are only operating within the framework provided by national governments. When governments dismantle their trade barriers, such as import tarriffs and quotas, then price differences will simply be arbitraged away by brokers (i.e. you see something selling for $10 in country A and $5 in country B, export/import it and sell it in country A for $6 - eventually the margin will tend to zero). But that can only happen if there are no obstacles to freely moving goods and capital around.
The biggest barrier to this is ironically the EU itself who protect manufacturers like Levi Strauss from UK retailers who source overseas and want to sell at less than Levi's MRRP. Not to mention the distortions the EU create in the market with their subsidies of inefficient industries.
Frankly, I don't know who's worse, corrupt corporations (as distinct from well-run corporations) or corrupt politicians - and the EU isn't even democratically elected! A shareholder has far more influence on a company than a voter has on the European Commission (that's a fact).
Re:Nothing new for Nintendo (Score:3, Insightful)
Yeah, you can tell that by their strategy of making kick ass games.
Re:Basic rights (Score:5, Insightful)
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.
Re:$143 million dollars? (Score:5, Insightful)
Does Price Fixing even make sense? (Score:3, Insightful)
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.
Re:Nothing new for Nintendo (Score:2, Insightful)
Re:No surprise (Score:5, Insightful)
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
Re:Rights (Score:4, Insightful)
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
Re:Good for them (Score:3, Insightful)
Re:Good for them (Score:3, Insightful)
Whoever makes that price-fixing deal in Europe ought to be paying $143M out of pocket as well as facing 5 years in a hard-core, anal rape kind of prison. I'd even throw in manditory termination without severance from whatever company they worked for, with lifetime banishment from the industry.
So let me get this straight. You're saying that if a foreign country doesn't like what your company is doing, then they should be allowed to extradite you to their country and punish you as they see fit?
So, if your product is sold in Libya, and Libya thinks that your "action figures" are offensive because the women aren't covering their faces, you'd have no problem with the US packaging you up and shipping you off to Libya, to spend the next 5 years in THEIR prison, after losing all your assets and being banished from your job, because you had the moral contempt to actually manufacture an idol of a female who is not covering her face?
Ok then...
Re:Good for them (Score:3, Insightful)
Also, of course you only hear about screwy corporations on the news, just like you only hear about terror attacks in Israel/Palestine, or hostages in Moscow. CNN wouldn't attract a lot of eyes if its headlines ran 'Corporation continues ethical business as usual; 30 people on bus in Jerusalem get where they're going without incident; 700 theatre patrons watch play without interruption'. Much though I wish that were all the news there was to report, people are attracted to news about death, corruption, greed, and so on, so when four Israelis die, they focus on that, not the five million that didn't; when corporations cheat, they focus on those, not the ones that did the math right, and so on. For that matter, every time people get together to protest globalization, we end up with riots, assaults, property damage, and so on. Can we really judge all anti-globalists based on those few? Can we judge all multi-nationals based on those few? I don't think so.
--Dan
It's because of how they are organized (Score:2, Insightful)
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.
So, I have a question.... (Score:3, Insightful)
Re:Good for them (Score:4, Insightful)
You're making unsupportable generalizations here, you know that? Boeing, Home Depot, Fannie Mae, State Farm, Morgan Stanley, Target, P&G, Berkshire Hathaway, Safeway... these companies are all in the Fortune 50. Please list your complaints against each, in as much detail as possible, so we can all accept your assertion that big companies are automatically evil.
Re:$143 million dollars? (Score:4, Insightful)
Comment removed (Score:2, Insightful)
Re:Sounds like DVD region encoding to me... (Score:3, Insightful)
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.
Re:So... (Score:3, Insightful)
Less demand ==> Lower prices
High demand ==> Higher prices
is a pretty bad simplification. There is a great demand for cheap bread, but that doesn't mean cheap bread is expensive.
What offer vs. demand means is that you have two curves, the demand curve and the offer curve. The demand curve is a hyperbolic shaped x-demand/y-price curve: few people want to pay a high price for a good, many people want to pay a low price. The offer curve has the inverse behaviour : many suppliers want to supply high margin goods, few are willing to suppl low margin goods.
We live in a world where there is demand AND offer so the demand and offer curves are plotted on the same chart. As one is rising from 0, and the other is faling to 0, so they must cross at some equilibrium point, the one where the transactions do occur. In fact it is not a point, it is broader, if I enter in a shop and my Coke is
Fluctuations in offer or demand are translated to the correspondent curve going up or down, setting a new equilibrium point. This is left as an exercise to the reader.
Those who had economics 201 are welcome to flame me away.
Re:Basic rights (Score:4, Insightful)
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.
Re:What strikes me (Score:3, Insightful)
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.
Re:Nintendo never changes (Score:4, Insightful)
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.
Food For Thought (Score:3, Insightful)
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... =)
Your 55% and the lack of ROI (Score:3, Insightful)
Or don't you like roads, electrical grids [usda.gov], and all that other good infrastructure and all those wonderful services? Me, personally, I like paying taxes [slashdot.org].
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.
Re:Price Discrimination not Price Fixing (Score:3, Insightful)
This is exactly what the MPAA is doing with region coding. I don't know if they'll get slapped for it, ever.
Re:What strikes me (Score:2, Insightful)
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.