Co-operation by Nintendo sees it price-fixing fine reduced on appeal

By admin

May

5

2009

Fines levied for market fixing by the games console manufacturer Nintendo and its distributers back in 2002 have had their fines reduced by a European Union court.

The co-operation given to the investigation by the companies was the reason given for its ruling that there should be a reduction in most of the fines that were given.

Following the findings that Japan’s Nintendo and a total of seven distributers including John Menzies in the UK had colluded to keep console prices high the European Commission fined the companies a total of €167.8 million back in 2002.

The co-operation given in the Commission’s competition law investigation has led the EU’s Court of First Instance to advise that the majority of these fines should be reduced by 40 percent or more.

The findings of the Commission were that a collusion to stop parallel export of consoles and games had been undertaken by Nintendo and its distributors. This meant that movement of consoles from European Union countries where the consoles and games were cheap to countries where these item cost more to be sold at a discounted price were stopped through an agreement with distributors.

Distributors were forced to comply with Nintendo’s demands due to it using its power to control the supply of these products that were considered highly in-demand, the Commission found.

A statement from the court said “The [companies] collaborated closely in order to identify the origin of any parallel trade. Operators which allowed parallel exports were punished by a reduction of their supply or by a total boycott by Nintendo. The Commission decided that, since the conduct of those undertakings from 1991 until 1997 had had the object and effect of restricting parallel exports of the products, it was contrary to Community law.”

The leader of the companies in their behaviour and the instigator of this illegal activity was identified as being Nintendo. Nintendo was fined €149 million, while a fine of €4.5 million was levied against distributor Itochu.

The Commission, which regulate adherence to EU Competition law, said that the fine against John Menzies should be reduced as the company had helped in the investigation. Also, other companies that had helped as much as John Menzies should also have the same discount applied.

A statement from the Court of First Instances read “In the contested decision, the Commission took account of John Menzies’s cooperation, with the result that it reduced that undertaking’s fine by 40%. The Court held that pursuant to the principle of equal treatment, since Nintendo produced the relevant documents at the same stage of the procedure and its cooperation must be regarded as comparable, it must benefit in this respect from the same level of reduction of fine.”

It added “Consequently, the Court reduced the fine imposed on Nintendo to €119.2425 million.”