The European Commission announced on Nov. 5 it is investigating Corning Inc., maker of the popular Gorilla Glass product used for many mobile device screens, to determine whether the company has abused its market position in violation of Europe’s anti-competition laws. Corning has a particularly close relationship with Apple, providing the material for iPhones, iPads, and Apple Watches.
In a statement to the press, the Commission revealed that investigation will center around whether Corning:
>> Distorted competition via exclusive supply agreements with mobile phone manufacturers and with companies that process raw glass.
>> Entered into agreements that required OEMs to source all, or nearly all, Alkali-AS Glass demand from Corning.
>> Granted exclusive rebates to OEMs on the condition that they comply with exclusive sourcing obligations.
>> Required OEMs to report competitive offers, and stipulated OEMs only accept low offers if Corning fails to match the price.
The Commission suggests these agreements may have led to rival glass producers being excluded from large segments of the market, leading to reduced customer choice, higher prices, and stifled innovation.
Citing Article 102 of the Treaty on the Functioning of the European Union, which prohibits abuse of dominant market positions, the Commission adopted a Preliminary Assessment summarizing the facts of the case. Corning may to submit a response.
In a statement released to numerous media outlets in response to the investigation, a Corning spokesperson said the company is “committed to compliance with all applicable rules and regulations where it does business. As part of that commitment, we work with local regulatory authorities to ensure open discussion and cooperation.”
Corning and Apple have shared a close relationship dating back to 2007, when Apple CEO Steve Jobs required the original product to be launched with a glass screen instead of a hard plastic design prone to scratching. The Corning product is made from alkali-aluminosilicate glass which is particularly break-resistant. The two companies have only grown closer. In 2017, Apple awarded Corning $200 million from its Advanced Manufacturing Fund, which seeks to bolster Corning’s research and development efforts. Corning has since received awards of an additional $250 million and $45 million.
In addition to Apple, Corning supplies Gorilla Glass for products by Asus, Blackberry, Fujitsu, Google, Huawei, Lenovo, Motorola, Nokia, OnePlus, Samsung, Sony, and others, according to its website.
Corning is the number one producer of mobile glass globally. Other are Asahi Glass Co., Ltd. and Nippon Electric Glass Co., Ltd. (NEG) of Japan; Schott of Germany; and Sichuan Xuhong Opto-Electronic Technical Co., Ltd., of China.