Nintendo and seven European distributors were fined a total of 167.8 million euros, the fifth-largest ever imposed by the European Union's executive arm for cartel practices.

"Every year, millions of European families spend large amounts of money on video games," Competition Commissioner Mario Monti said.

"They have the right to buy the games and consoles at the lowest price the market can possibly offer and we will not tolerate collusive behaviour intended to keep prices artificially high," he said.

Nintendo accepted it had been wrong but vowed to appeal at the Luxembourg-based European Court of First Instance over the "surprising" level of the fine.

"Nintendo accepts the finding that, up to 1998, its distribution practices did not comply with EU competition rules," Nintendo Europe said in a statement.

"Nintendo has rectified the relevant aspects of its distribution in Europe and has instigated a thorough and far-reaching compliance programme that enables the free flow of product across Europe," it said.

Nintendo's net profit rose 10.2 percent in the last fiscal year on the back of healthy sales of a new hand-held gaming device, Game Boy Advance, and its Gamecube console for home use.

But the creator of Super Mario is locked in a price war around the world with the Xbox console of Microsoft and Sony's PlayStation2.

The Japanese company prevented "parallel imports" of consoles and games from cheaper markets such as Britain from entering other EU countries, the European Commission concluded after a seven-year investigation.

"It's been found that Nintendo and its distributors have been involved in this illicit behaviour for most of the '90s, between '91 and '98," commission spokeswoman Amelia Torres said.

The fines were the fourth largest imposed by the commission against a single company and the fifth largest overall, she said.

The highest of 855 million euros was slapped last year against a group of pharmaceutical giants accused of running a cartel in vitamin pills.

The commission found that prices for Nintendo consoles and games were up to 65 percent cheaper in Britain -- Europe's biggest computer game market -- than in Germany or the Netherlands.

The low prices in Britain "understandably tempted traders into re-exporting cheap goods to high-price countries", the commission said.

"Under the leadership of Nintendo, the companies intensively collaborated to find the source of any parallel trade," it said.

"Traders that allowed parallel exports to occur were punished by being given smaller shipments or by being boycotted altogether."

Nintendo's British distributor, John Menzies, was initially boycotted for failing to toe the line on parallel imports but then colluded with the Japanese company after 1996, Brussels said.

The commission noted, however, that both Nintendo and John Menzies had cooperated with preliminary enquiries from December 1997.

The other distributors fined were Concentra in Portugal, Linea in Italy, Bergsala in Sweden, Japanese trading house Itochu, Itochu's Greek unit Nortec, and the Belgian unit of Germany's CD-Contact Data.

SPACE.WIRE