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European antitrust regulators next week will fine Japanese video game maker Nintendo and a number of its distributors for sales practices it employed in the mid-1990s, EU Commission sources told Reuters.
Nintendo Co. Ltd. 7974.T 7974.OS , maker of the popular handheld video game console Game Boy, plus the Donkey Kong and Pokemon video games, was accused in 2000 of collaborating with distributors to limit cross-border flow of its products in an effort to raise wholesale prices.
The EU is expected to take up the matter next week, slapping the world's No. 2 video game maker with a fine. The Nintendo settlement is on the commission agenda for Wednesday, EU sources said.
"A formal decision has not yet been received from the European Commission. However, we are aware that a decision is imminent," a Nintendo spokesman in London said.
The size of the fine could not be confirmed. A spokesman for Nintendo of America confirmed that Nintendo had already set aside funds to deal with the fine.
In 2000, the European Commission said it believed Nintendo and seven of its distributors participated in a "cartel-like" arrangement with the aim of partitioning the market and inflating wholesale prices for its consoles and games.
Nintendo has cooperated with the EU from the outset of the investigation, which dates back to 1995. Nintendo no longer operates its European retail channel in this manner.
Shares in Nintendo, which earlier this month cut its hardware shipment forecast for 2002/03, have been in a tailspin, down 19 percent this month. It closed up 2.6 percent on Friday at 11,350 yen in Tokyo.
Demand for Nintendo's premier product, the GameCube, has tailed off lately in the crucial Japanese and German markets. Still, the company expects to ship 3 million GameCubes to European resellers by year-end.
GameCube is battling with Sony Corp.'s 6758.T market-dominant PlayStation 2 and Microsoft Corp.'s MSFT.O Xbox for share in the brutally competitive video games console market.
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