Market
26
Nov
2024
3
min read

Corning proposes remedies to settle EU antitrust investigation over Gorilla glass

Corning, a leading producer of specialty glass, is currently under investigation by the European Commission for potential violations of EU antitrust laws. The probe, initiated on November 6, 2023, focuses on allegations that Corning abused its dominant market position in the glass industry, specifically with its flagship product, Gorilla Glass, which is widely used in smartphones, tablets, and other mobile devices.

Alleged anti-competitive practices

The European Commission's investigation centers around restrictive agreements between Corning and mobile phone manufacturers (OEMs) and glass finishers. These agreements reportedly include exclusive sourcing obligations, where OEMs are required to purchase nearly all their Alkali-AS Glass from Corning, alongside exclusivity rebates that offer financial incentives to OEMs for meeting these obligations.

Additionally, Corning’s contracts with glass finishers are said to have similar restrictions, including exclusive purchase terms and clauses preventing finishers from challenging Corning’s patents. The Commission argues that these practices may have blocked competitors from accessing significant portions of the market, harming innovation and consumer choice while potentially raising prices.

Corning’s proposed remedies

To resolve the investigation, Corning has proposed several remedies, including waiving all existing exclusivity clauses in its agreements and committing to not use them in the future. The company also promised to avoid forcing customers to buy specific quantities of stock and agreed to enforce its patents only in cases of patent infringement, not contractual violations.

If accepted by the EU, these commitments will be globally applicable and enforced for at least nine years. During this period, Corning will be monitored for compliance, and failure to adhere could result in fines of up to $1.25 billion, based on its 2023 financial performance.

Potential impact on the market

The European Commission’s ongoing investigation highlights growing concerns over monopolistic behavior in the technology sector. With Corning's dominant position in the market for durable mobile device glass, the outcome of this case could have significant implications for competitors, OEMs, and consumers. As Corning navigates this scrutiny, its commitments, if accepted, may reshape the competitive landscape for break-resistant glass products, fostering greater competition and innovation in the market.

A company under scrutiny

Founded in 1851, Corning has become a global leader in specialty glass products. While the company’s Gorilla Glass is renowned for its durability and use in mobile devices, its influence in the glass market has drawn regulatory attention. The EU's investigation into Corning’s business practices could lead to substantial changes in the way the company operates in the competitive space for mobile device screens.

Conclusion

As the European Commission investigates Corning for possible antitrust violations, the outcome of this case will significantly influence the market dynamics of mobile device protective glass. The commitment to fairer practices could encourage competition, benefiting both consumers and the broader tech industry. However, the proposed remedies are still open for review, and stakeholders will have six weeks to raise objections before the EU finalizes the decision.

 

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