10 December 2015

French Competition Authority abandons Nintendo pricing policy proceedings

On 2 February 2010, upon the request of the French Ministry of Economy, the French Competition Authority (the FCA) launched two investigations into Nintendo France and Nintendo Co Ltd´s (together, Nintendo) pricing practices in the French video games sector.  In particular, the FCA examined the pricing policies for the following Nintendo products:

  1. The “Wii” gaming console (Wii) and related games and accessories, implemented between December 2006 and November 2007.
  2. The “Wii Sports pack”, implemented between October 2009 and November 2009, when the price of the Wii decreased.

On 28 October 2014, the FCA sent a Statement of Objections to Nintendo for engaging in resale price maintenance with its distributors over these pricing policies, in violation of Article 101 TFEU and the French Commercial Code, in the market for gaming consoles, games and accessories.

The FCA found that resale price maintenance exists where the following three cumulative conditions are met: (i) the recommended resale price is announced by the supplier; (ii) price monitoring is subsequently implemented; and (iii) the recommended resale price is widely implemented by distributors.

In particular, the FCA found that resale prices could be recommended by suppliers via media events such as press conferences, especially where the event benefits from large scale media coverage.  The CEO of Nintendo´s announcement of the Wii´s resale price at a press conference on 15 September 2006 was held to constitute a “recommended” resale price to distributors.  However, due to the absence of any monitoring policy, the FCA ultimately held that in this case resale price maintenance could not be established.

In addition, the FCA found that Nintendo did not announce a recommended price reduction for the Wii Sports Pack.  As none of the requisite conditions for resale price maintenance were met, the FCA decided not to pursue these proceedings and issue a final sanction decision against Nintendo.

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