Corning Faces EU Competition Probe

The European Commission has opened a formal investigation into Corning. The body wants to assess whether the company may have abused its dominant position on the worldwide market for a special type of glass that is mainly used to protect the screens of handheld electronic devices, such as mobile phones.

The EC is concerned that Corning may have distorted competition by concluding anti-competitive exclusive supply agreements with mobile phone manufacturers and companies that process raw glass. In particular, it appears that in its agreements with mobile OEMs Corning included exclusive sourcing obligations requiring OEMs to source all or nearly all of their Alkali-AS Glass demand from Corning, exclusivity rebates granting rebates to OEMs on the condition that they comply with the exclusive sourcing obligations, and ‘English clauses' obliging OEMs to report to Corning on competitive offers, and allowing OEMs to accept that offer only if Corning fails to match the price.

Additionally, it appears that in its agreements with finishers, Corning included exclusive purchase obligations obliging finishers to purchase all or nearly all of their Alkali-AS Glass demand, or an important subtype of Alkali-AS Glass, from Corning, and no challenge clauses preventing finishers from challenging Corning's patents. The EC is concerned that the agreements that Corning put in place with OEMs and finishers may have excluded rival glass producers from large market segments, thereby reducing customer choice, increasing prices, and stifling innovation to the detriment of consumers worldwide.

If proven, the behavior under investigation may breach EU competition rules, which prohibit the abuse of a dominant position. The EC will carry out its in-depth investigation as a matter of priority. The opening of a formal investigation does not prejudge its outcome. In parallel to the opening of proceedings, the Commission has adopted a Preliminary Assessment summarizing the main facts of the case and identifying its competition concerns.

”It is a 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 of cheaper and more break-resistant glass,” said Margrethe Vestager, EC Executive Vice-President.