2003/675/EC: Commission decision of 30 October 2002 relating to a proceeding pursuant to Article 81 of the EC Treaty and Article 53 of the EEA Agreement (COMP/35.587 PO Video Games, COMP/35.706 PO Nintendo Distribution and COMP/36.321 Omega — Nintendo) (Text with EEA relevance.)(notified under document number C(2002) 4072)

• Published date: 08 October 2003
• Subject Matter: competencia,Prácticas colusorias,concurrence,Ententes,concorrenza,Intese
• Official Gazette Publication: Diario Oficial de la Unión Europea, L 255, 08 de octubre de 2003,Journal officiel de l’Union européenne, L 255, 08 octobre 2003,Gazzetta ufficiale dell’Unione europea, L 255, 08 ottobre 2003

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2003/675/EC: Commission decision of 30 October 2002 relating to a proceeding pursuant to Article 81 of the EC Treaty and Article 53 of the EEA Agreement (COMP/35.587 PO Video Games, COMP/35.706 PO Nintendo Distribution and COMP/36.321 Omega — Nintendo) (Text with EEA relevance.)(notified under document number C(2002) 4072)

Official Journal L 255 , 08/10/2003 P. 0033 - 0100

Commission decision

of 30 October 2002

relating to a proceeding pursuant to Article 81 of the EC Treaty and Article 53 of the EEA Agreement

(COMP/35.587 PO Video Games, COMP/35.706 PO Nintendo Distribution and COMP/36.321 Omega - Nintendo)

(notified under document number C(2002) 4072)

(Only the English, Portuguese, Greek, German, Italian, and Swedish texts are authentic)

(Text with EEA relevance)

(2003/675/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community,

Having regard to the Agreement on the European Economic Area,

Having regard to Council Regulation No 17 of 6 February 1962, First Regulation implementing Articles 85 and 86 of the Treaty(1), as last amended by Regulation (EC) No 1/2003(2) and in particular Articles 3 and 15(2) thereof,

Having regard to the complaint lodged by Omega Electro BV on 28 November 1996, alleging infringement of Articles 81 and 82 of the Treaty by Nintendo Netherlands BV and Nintendo UK Ltd and requesting the Commission to put an end to that infringement and to impose a fine,

Having regard to the Commission Decision of 25 April 2000 to initiate proceedings in this case,

Having given the undertakings concerned the opportunity to make known their views on the objections raised by the Commission in accordance with Article 19(1) of Regulation No 17 and with Commission Regulation (EC) No 2842/98 of 22 December 1998 on the hearing of parties in certain proceedings under Articles 85 and 86 of the EC Treaty(3),

Having regard to the final report of the Hearing Officer in this case(4),

After consulting the Advisory Committee on Restrictive Practices and Dominant Positions,

WHEREAS:

1. THE FACTS

1.1. The parties to the proceeding

(1) The parties will be referred to as follows in the present decision: in the factual part the authors of the infringement will be mentioned. In the legal assessment, reference will be made to the actual addressees of this Decision.

1.1.1. The Nintendo group of companies

(2) The ultimate parent company of the Nintendo group of companies is Nintendo Corporation Ltd (NCL), a listed company established in Kyoto, Japan. Nintendo's business in the EEA is conducted by the following wholly-owned(5) subsidiaries:

- Nintendo of Europe GmbH (NOE). NOE is Nintendo's main EEA-based subsidiary. It coordinated certain business practices of Nintendo in Europe and was the exclusive distributor for Germany, at least from January 1991(6) until 31 December 1997,

- Nintendo of America Inc (NOA), although not itself distributing Nintendo's products in the EEA, was also responsible for the coordination of certain of Nintendo's business practices in Europe during the period relevant for this Decision,

- Nintendo Netherlands BV (NN). NN was the exclusive distributor for the Netherlands, at least from 1 January 1993(7) until 31 December 1997. This company is currently called Nintendo Benelux BV,

- Nintendo France SARL (NF). NF was the exclusive distributor for France, at least from 31 December 1992(8) until 31 December 1997,

- Nintendo España SA (NE). NE was the exclusive distributor for Spain, at least from 1 January 1994(9) until 31 December 1997,

- Nintendo Belgium SPRL (NB) was the exclusive distributor for Belgium and Luxembourg, from at least 1 January 1994 until April 1997(10),

- Nintendo UK Ltd (NUK) was the exclusive distributor for the United Kingdom and Ireland from at least March 1993 until 4 August 1995(11).

(3) The term "Nintendo" may refer to any or all of those companies in the Nintendo group.

1.1.2. The independent Nintendo distributors

(4) In other territories, Nintendo had appointed independent exclusive distributors.

(5) THE Games Ltd, a trading division of John Menzies Distribution Limited, which is a wholly-owned subsidiary of John Menzies plc, was appointed in August 1995 as independent exclusive distributor for the United Kingdom and Ireland, after NUK ceased performing this function (together referred to hereafter as THE). THE remained Nintendo's exclusive distributor for this territory until at least 31 December 1997.

(6) Chaves Feist & Cia LDA, later called Soc. Rep. Concentra LDA and, since September 2001, Concentra - Produtos para crianças SA (hereafter referred to as Concentra) was Nintendo's exclusive distributor for Portugal, at least from 14 May 1991 until 31 December 1997(12);

(7) Linea GIG SpA (hereafter referred to as Linea) was Nintendo's exclusive distributor for Italy, at least from 1 October 1992(13) until 31 December 1997.

(8) Bergsala AB (hereafter referred to as Bergsala) has been Nintendo's exclusive distributor for Sweden since 1981 and, since 1986, also for Denmark, Norway, Finland and Iceland(14).

(9) Itochu Hellas EPE (in correspondence often referred to as Itochu Hellas Ltd) was Nintendo's exclusive distributor for Greece at least from 14 May 1991 until February 1997. All shares in Itochu Hellas EPE were always held by Itochu Corporation or wholly-owned subsidiaries of Itochu Corporation(15). Thus, Itochu Hellas EPE is, ultimately, a wholly-owned subsidiary of Itochu Corporation (hereafter referred to Itochu). Itochu Corporation is headquartered in Tokyo, Japan.

(10) Nortec AE (hereafter referred as to Nortec) was Nintendo's exclusive distributor for Greece subsequent to Itochu from at least 4 April 1997 until 31 December 1997(16);

(11) CD-Contact Data GmbH was Nintendo's exclusive distributor for Belgium and Luxembourg from at least April 1997 until 31 December 1997. For this purpose, it founded a wholly-owned subsidiary, Contact Data Belgium NV, for distributing the products in this territory(17) (referred to hereafter as Contact).

(12) On 29 September 1998, Activision Inc, a company established under the laws of the Stare of Delaware (USA), gained control over CD-Contact Data GmbH by purchasing all its shares.

(13) Subsequently, on 9 June 1999, CD-Contact Data GmbH founded a wholly-owned subsidiary, CD Contact data BV established in the Netherlands. All shares in Contact Data Belgium NV, previously held by CD-Contact Data GmbH, were then transferred to this newly founded company. CD-Contact Data GmbH continues to exist as a holding company(18).

1.1.3. Omega

(14) Omega Electro BV (hereafter referred to as "Omega") is a company established in the Netherlands that is active in the import and sale of electronic games. On 26 November 1996, it lodged a complaint under Article 3(2)(b) of Regulation No 17 that primarily concerned the distribution of Nintendo game cartridges and consoles and contained a variety of allegations, inter alia, the hindrance by Nintendo of parallel trade and its operation of a resale price maintenance policy in the Netherlands.

1.2. Relevant product markets

(15) This case relates to game consoles and video games or game cartridges, which allow users to play games displayed on a screen.

(16) In the correspondence of the parties the term "hardware" is often used as a synonym for "game console". In this Decision, the term "game console" is used systematically, except for direct quotations. Similarly, in the correspondence of the parties the term "software" is often used as a synonym for "game cartridge". In this Decision, the term "game cartridge" is used systematically, except for direct quotations.

(17) During the period of the infringement, Nintendo produced various types of game consoles (see table 1 below) and game cartridges for use with these game consoles. Collectively, they are referred to hereinafter as "the products"(19).

1.2.1. The game consoles

(18) Game consoles are electronic devices dedicated to and specifically designed for playing video games. The user interface is a simple pad or a control, such as a "joy stick", which allows the user to control the movements of the characters on the screen. Game consoles can be divided into static and hand-held game consoles. The generations of static consoles during the period of the infringement were called 8-bit, 16-bit, 32-bit and 64-bit consoles, in ascending order of performance. The various consoles on the market during the period relevant for this Decision and their manufacturers are indicated in Table 1.

TABLE 1

Consoles produced by the major game console producers during the period relevant for this Decision

>TABLE>

1.2.1.1. Personal computers and game consoles are not substitutable products

Demand side

(19) Like game consoles, personal computers (PCs) allow games to be played. However, a PC cannot be regarded as a substitute for either a static or a hand-held game console for the following reasons.

(20) PCs and game consoles are intended to fulfil different consumer needs:

- whereas PCs are, by definition, multitask devices, intended to satisfy a wide range of needs, including, but not necessarily, game-playing(20); game consoles are designed solely, or at least optimised, to satisfy only the gaming needs, in particular of the younger generations,

- in addition, it is uncontested that the technical performance and characteristics of static game consoles for game-playing are substantially better than those of PCs. This can be illustrated by statements to this effect by THE and Nintendo's presidents(21),

- furthermore, in contrast with static game consoles, PCs have only a short life span as a game-playing platform capable of playing the latest released games unless expensive upgrades are made(22),

- the need to upgrade a PC makes it, in addition, a more complex game-playing device than a game console and reduces its attractiveness...