Plaintiff States alleged that during the period between March 1, 1987, and December 31, 1990, Nintendo engaged in unlawful price fixing and efforts to maintain resale prices on the Nintendo Entertainment System 8-bit video game console (NES). The Plaintiff States alleged that Nintendo coerced dealers to comply with its pricing policy by threatening to reduce or eliminate the
supply of its products, or by imposing different credit terms to non-complying dealers. In response, many dealers complied with Nintendo?s pricing policy, thus establishing a conspiracy. In the resulting settlement, Nintendo agreed to cease and desist fixing, controlling, or maintaining the resale price for the console. Nintendo also agreed to cease from pressuring or coercing dealers into illegal agreements.
The settlement allowed Nintendo to suggest retail prices but required that all promotional material include the statement that dealers were free to determine their own prices. In addition to injunctive relief, Nintendo also agreed to pay $1.75 million for Plaintiff States administrative costs, investigative costs and attorneys fees. Other provisions included $3 million to be distributed to Attorneys General?s
public purpose funds. Nintendo also agreed to reimburse dealers up to $25 million for consumer coupons redeemed by qualified purchasers which according to Nintendo databases included up to 4.7 million people who bought the NES console between March, 1987, and December 31, 1990. The Federal Trade Commission also participated in the investigation.