Corning offers package of commitments in attempt to resolve EU antitrust probe

After the European Union launched an investigation into Corning earlier this month, citing concerns over alleged exclusivity deals, the Gorilla Glass maker proposed a series of changes to its contract provisions aimed at resolving the probe.

The US company is a supplier to major electronics brands, including the Apple iPhone, and the changes could also be aimed at preventing further intensification of the investigation. Confirmed violations of competition rules may result in fines of up to 10% of global annual turnover.

The European Commission is now collecting industry feedback on Corning’s proposal. Comments may be submitted for approximately six weeks.

If the EU accepts Corning’s proposals after this market test, the package of commitments will become legally binding on the company. They will also apply worldwide and remain in force for nine years, and their implementation will be monitored by a trustee who will report to the Commission. Any violation of obligations is fraught with large fines.

Exclusive deals, procurement quotas and patent protection within

Corning has proposed to waive all exclusivity provisions in all of its current agreements with device manufacturers (OEMs) and finishing companies to supply alkali-aluminosilicate glass (Alkali-AS Glass), which is primarily used for displays in mobile devices. There is also an agreement not to use such provisions (or other provisions with similar effect) in future agreements throughout the world.

For devices intended for sale in the European Economic Area (EEA), Corning also proposes not to require OEMs to purchase or otherwise source any quantity of Alkali-AS glass from their own business. It is also promising that it will not offer device manufacturers any cost advantages in meeting such requirements.

For non-EEA OEMs’ aggregate demand for alkali glass AS and clear glass ceramics (also known as “clear glass ceramics”), and for their total demand for either lithium aluminosilicate glass (LAS Glass) or clear glass ceramics , it is proposed not to require device manufacturers to buy or force their supply chain to buy more than 50% of the corresponding demand from Corning. In addition, Corning would not offer OEMs any cost advantages in meeting such requirements, according to the proposal.

Another offering is aimed at third-party companies that process raw glass (called finishers). Corning proposes not to require finishing businesses to purchase more than half of Corning’s total demand for sodium aluminosilicate glass (NAS Glass), LAS Glass and clear glass ceramics; and not condition price advantages on such procurement requirements.

In addition, the company proposes not to require – in any other way – that finishing facilities concentrate more than 50% of Corning’s total demand.

“This means that finishers can freely decide how many different coating materials (NAS glass, LAS glass or clear glass ceramic) they want to purchase from Corning to meet this overall limit,” the European Commission said in a press release summarizing Corning recommendations. offer.

Further commitments include protecting Corning’s patents on impact-resistant safety glass. Here he proposed to substantiate any statement only for infringement of a patent, not for breach of contract. It also would not use any contractual mechanisms (such as fines) to support patent claims, according to the proposal.

As part of this proposal, Corning will also communicate with device manufacturers and finishing departments to explain changes to their business terms, including in English and Mandarin.

Corning, maker of Gorilla Glass for phones, faces EU antitrust probe