EC to investigate Nintendo’s distribution

Kyodo

The European Commission said Friday it has decided to open a formal investigation into Nintendo Co. and seven other companies over distribution practices for Nintendo products in Europe.

The commission said it warned the companies in a “statement of objections” that their way of dividing up the market for Nintendo game consoles and video games “appears to be in breach of EU antitrust rules by artificially keeping prices higher.”

The statement of objections, a formal step in EU antitrust investigations, was sent to Nintendo, Linea GIG S.p.A, Itochu Corp., Concentra L.DA, Bergsala AB, Nortec SA, CD-Contact Data GmbH and John Menzies PLC.

“The commission believes that the companies concerned participated in a cartel-like arrangement with the aim of partitioning the European single market,” the commission said in a statement.

The commission, the executive body of the 15-member European Union, also accused Nintendo of making it difficult for retailers to engage in price competition.

The companies have two months to offer a written reply, it said. The commission will then decide whether it will impose fines.

The commission said it has been investigating Nintendo’s distribution practices since 1995. The infringements continued despite the fact that Nintendo and some of the other companies knew of the investigation, it said.

Nintendo produces various types of consoles and games.

By 1997, Nintendo had sold 55 million Game Boy consoles, making it by far the most popular hand-held console in the world. It had also sold 235 million Game Boy compatible games worldwide.

The commission said that as a result of dividing up the European market, “consumers in countries where Nintendo products were expensive could not benefit from low-priced, parallel imported products.”

“The investigation showed price differences were frequent and large, sometimes double from one EU country to another,” it said.