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..."
hmmm who's going to pay the fine. (Score:3, Interesting)
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.
Re:So... (Score:2, Interesting)
Basic rights (Score:3, Interesting)
It seems like it has more to do with the open trade policies within the EU than it does with Nintendo.
My take (Score:3, Interesting)
Rights (Score:3, Interesting)
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.
Re:Good for them (Score:5, Interesting)
If the protesters around IMF had their way, there would be much more trade barriers between countries, making it much easier for corporations such as Nintendo to set different prices in different regions.
Good for the Europeans, bout damn time someone smacked those companies down, even if it is one with good Karma like nintendo.
Hum... so if the market is not very competitive you propose knocking down the companies. I think the opposite - what is needed is more companies. And, this is exactly what has happened in the video game market. With three competing systems it is probably very difficult for Nintendo to rig prices, not because EU bureaucrats tell them not to, but because they would lose their business.
Tor
Sounds like DVD region encoding to me... (Score:5, Interesting)
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
Why cant they.... (Score:4, Interesting)
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.
Errrrr ... Why ? (Score:3, Interesting)
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%
No surprise (Score:4, Interesting)
Some facts:
And so on and so on. You can find more facts about it at the rather appallingly designed Rip-off Britain [rip-off.co.uk] website.
Re:Doesnt make sense (Score:3, Interesting)
This is interesting because it's not that long ago that exactly the opposite was decided in the case of Tescos selling grey market Levis. But I think that was a UK court, not a EU one.
The Expurgation of Maniac Mansion for the Nintendo (Score:4, Interesting)
Obligatory link to The Expurgation of Maniac Mansion for the Nintendo Entertainment System [crockford.com]
Behold, evil!
What strikes me (Score:4, Interesting)
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.
Re:No surprise (Score:3, Interesting)
You can buy a Rover car cheaper in Denmark (by over a thousand pounds) than in a dealership in Longbridge, Birmingham (next to the Rover factory). Tax is Denmark is similar if not more on cars also.
Home Depot (Score:2, Interesting)
ummm but... (Score:3, Interesting)
Yeah but why would they? Those companies are not Asian, they are the "good guys" not the "bad" guys.
Re:No surprise (Score:3, Interesting)
I remember hearing a lot about the car companies being in trouble over this practice, and they were told to stop it. Little has changed by the look of it.
Re:Home Depot (Score:3, Interesting)
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 [www.cbc.ca].
DVD Region Coding? (Score:1, Interesting)
What a surprise they fix prixes.. (Score:2, Interesting)
Price Discrimination not Price Fixing (Score:4, Interesting)
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.
Re:Basic rights (Score:3, Interesting)
I agree, with a slight adjustment: $100 million. Damned if I can find the link, but some bored accounting flak did an article for Newsweek about Billy G a while ago. It concluded that you could take away all but $100 million from his portfolio, and his lifestyle would not change one iota. That's literally the limit of tangible wealth; after that, it's just keeping score against the other fat cats.
"$100 million should be enough for anybody."
There's a lot of confusion here + Why a fine??? (Score:3, Interesting)
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!
Not likely (Score:4, Interesting)
Kjella
Can't this be a good thing? (Score:2, Interesting)
Re:Flawed (Score:2, Interesting)
When resources from necessities to luxuries suddenly become extremely abundant, the gap narrows, and people are more content to live their lives. This isn't a commie utopia though. Special privilege must still be earned. society would probably reward people like top artists with that scarce beachfront property :), and 2nd-rate artists would have to make do with a beach on the hundreds of floating ocean cities, and a 3rd-rate artist'd make due with a simulation (until the simulation becomes reality... much later).
Anyway, as someone once said, "Incentives always matter", even in an economy of abundance.
--