Europe lifts the lid on Corning Gorilla Glass deals

The European Commission has opened a formal investigation to assess whether Corning may have abused its dominant position as a supplier of specialist Gorilla Glass for handheld electronic devices.

Corning’s Gorilla Glass is actually alkali-aluminosilicate (alkali-AS) which is particularly break-resistant used for mobile phones, tablets and smartwatches as well as some cars.

The Commission has concerns that Corning may have distorted competition by concluding anti-competitive exclusive supply agreements with mobile phone manufacturers and with the companies that process raw glass, the finishers.

The glass is used by Apple, Samsung, Renault and Ford as well as other OEMs such as Garmin and HP.

The Commission says the Corning agreements with mobile OEMs include exclusive sourcing obligations requiring OEMs to source all or nearly all of their Alkali-AS Glass demand from Corning as well as exclusivity rebates granting rebates on the condition that they comply with the exclusive sourcing obligations. This is a factor that led Intel to receive fines of XX form the commission.

So-called ‘English clauses’ in the contracts also required OEMs to report details of competitive offers to Corning, and only allowed the OEMs to accept that offer if Corning failed to match the price.

The agreements with finishers include exclusive purchase obligations obliging finishers to purchase all or nearly all of their Alkali-AS Glass demand from Corning. There are also ‘no challenge’ clauses preventing finishers from challenging Corning’s patents.

The Commission says it is concerned that the agreements that Corning put in place with OEMs and finishers may have excluded rival glass producers from large segments of the market, thereby reducing customer choice, increasing prices, and stifling innovation to the detriment of consumers worldwide.

The Commission will now carry out its in-depth investigation as a matter of priority with input from Corning. There is no legal deadline for bringing an antitrust investigation to an end. Its duration depends on a number of factors, including the complexity of the case, the extent to which the companies concerned cooperate with the Commission and the exercise of the rights of defence.

“It is very frustrating and costly experience to break a mobile phone screen. Therefore, strong competition in the production of the cover glass used to protect such devices is crucial to ensure low prices and high-quality glass. We are investigating if Corning, a major producer of this special glass, may have tried to exclude rival glass producers, thereby depriving consumers from cheaper and more break-resistant glass,” said Margrethe Vestager, Executive Vice-President in charge of competition policy.

Corning has been approached for comment.