The European Commission has launched a formal investigation into Corning Inc., a major U.S.-based producer of specialized glass, to assess whether the company may have violated EU antitrust laws by abusing its dominant market position. The inquiry centers on Corning’s alleged use of restrictive agreements to control the market for Alkali-aluminosilicate glass, or “Alkali-AS Glass,” which is widely recognized under the brand name Gorilla Glass. This material, known for its high durability and break resistance, is a staple for smartphone, tablet, and smartwatch screens globally.
Alleged anti-competitive practices with OEMs and finishers
The Commission’s concerns focus on Corning’s contractual agreements with mobile phone manufacturers (Original Equipment Manufacturers, or OEMs) and companies that process raw glass ("finishers").
According to the Commission, Corning's agreements with OEMs have included several restrictive clauses:
- Exclusive sourcing obligations: These require OEMs to source all or nearly all of their Alkali-AS Glass from Corning.
- Exclusivity rebates: OEMs receive rebates on the condition that they meet Corning’s exclusive sourcing obligations.
- English clauses: OEMs are obliged to inform Corning of competitive offers and can only accept these offers if Corning does not match them
Corning’s agreements with glass finishers reportedly include similar restrictions:
- Exclusive purchase obligations: Finishers must purchase all or a significant portion of their Alkali-AS Glass demand from Corning.
- No challenge clauses: Finishers are prohibited from challenging Corning’s patents, limiting potential legal disputes over intellectual property.
The European Commission is concerned that these restrictions might have effectively shut out Corning’s competitors from large portions of the market. Such practices could limit customer choice, raise prices, and stifle innovation, ultimately harming consumers worldwide.
Possible breach of EU antitrust rules
The Commission is investigating whether these actions violate Article 102 of the Treaty on the Functioning of the European Union (TFEU), which prohibits the abuse of a dominant position. Under EU law, dominant companies are allowed to compete but must refrain from activities that unfairly limit competition. The Commission’s investigation is still in its preliminary stages, and the opening of proceedings does not imply a definitive conclusion of misconduct.
Next steps in the investigation
The Commission has prepared a Preliminary Assessment outlining the primary facts and competition concerns related to the case. Corning may now propose legally binding commitments to address these issues. This process, guided by Article 9(1) of EU Regulation No 1/2003, allows for the resolution of antitrust concerns without a formal ruling on whether the law was broken. The Commission will prioritize the investigation but has not set a specific timeline, as the duration will depend on the case’s complexity and Corning’s level of cooperation.
Background on Corning and Alkali-AS Glass
Founded over 170 years ago, Corning has evolved into a global leader in specialty glass and ceramic materials. While the company produces a wide range of industrial and consumer products, it is best known in the electronics sector for its Gorilla Glass, a highly durable form of Alkali-AS Glass. This innovation has made Corning a pivotal player in the protective glass market for mobile devices.
Corning’s influence in the industry, however, has drawn scrutiny from regulators concerned about the company’s market power and contractual practices. With the European Commission’s investigation underway, Corning’s role in the mobile device glass market could undergo significant regulatory review.
Conclusion
The European Commission’s investigation into Corning underscores the ongoing vigilance over potential monopolistic practices in technology markets. As Corning navigates this scrutiny, the outcome may shape the competitive landscape for durable mobile device screens, impacting OEMs, consumers, and the broader market for protective glass.
Source: EU
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