Smartphone displays: EU Commission investigates US manufacturer

The European Commission is seeking comments on commitments offered by the US manufacturer Corning in a competition investigation. Corning, based in the city of the same name in the US state of New York, is a leading global manufacturer of alkali aluminosilicate glass (alkali AS glass). This is a special type of glass that is primarily used as a cover for the displays of portable electronic devices such as cell phones, tablets and smartwatches. Corning markets the cover glass mainly under the "Gorilla Glass" brand.

On November 6, the Commission opened a formal investigation on suspicion "that Corning may have distorted competition in the market for alkali AS glass by entering into anti-competitive exclusive supply agreements with cell phone manufacturers and with companies processing raw glass," according to a press release issued by the EU Commission on Sunday. According to the Commission's preliminary assessment, Corning has abused its dominant position and infringed EU law by excluding competitors from large market segments. This has reduced customer choice, increased prices and suppressed innovation to the detriment of consumers, according to the accusation.

Manufacturer offers voluntary commitments

To address the concerns of the European competition authorities, Corning has offered several commitments, including the waiver of all exclusivity clauses in all its current and future agreements with cell phone manufacturers and raw glass finishers worldwide. Other contractual clauses that bind companies to Corning and require them to purchase, or cause their supply chain to purchase, more than 50 percent of their respective demand from Corning will also be softened. When enforcing its patents relating to shatterproof cover glass, Corning intends to base future lawsuits only on patent infringement and not on breach of contract. Furthermore, the company promises not to use mechanisms such as contractual penalties to support its patent claims. The commitments offered by Corning are to apply worldwide and for a period of nine years. The European Commission has published the full text of the commitments on the Commission's competition website and "invites interested parties to submit their comments within six weeks of the publication of a summary of the proposed commitments in the Official Journal of the EU".

If these comments show that the commitments are suitable to address the Commission's competition concerns, the Commission may make these commitments legally binding on Corning. The company would then be legally obliged to comply with the commitments offered. In the event of non-compliance, the Commission could impose a fine of up to ten percent of the company's worldwide turnover.

(akn)