Corning Steers Clear of EU Antitrust Fine by Altering Supplier Agreements

Background of the Investigation

Corning, the well-known American glass company that produces Gorilla Glass, has made a pivotal decision to cease its exclusive contracts and other practices that the European Commission considered uncompetitive. This move was made to prevent potential penalties. The previous year, the European Commission began an investigation into Corning, alleging that the company suppressed market competition through exclusive supply agreements, which resulted in increased prices and hindered innovation. Recently, the commission has approved the pledges made by Corning, enforcing them under the EU regulatory framework.

Specific Commitments and Restrictions

During the commission's announcement of their investigation, it was highlighted that Corning had previously compelled mobile phone manufacturers to procure all or the majority of their Alkali-AS glass (commonly known as Gorilla Glass) from them, sometimes including rebates. In compliance with their new accord, Corning is obligated to eliminate all clauses related to exclusive dealings within current agreements involving phone manufacturers and raw glass processing firms. Furthermore, Corning is prohibited from forming any new exclusive agreements moving forward.

Global Impact and Monitoring

Additionally, within the European Economic Area, Corning is restricted from mandating manufacturers or their suppliers to purchase any particular quantity of Alkali-AS glass. On a global scale, they cannot impose requirements to buy more than half of the needed supply from Corning. This commitment spans nine years, with appointed trustees overseeing Corning's adherence to these conditions to ensure compliance.

Conclusion from the Inquiry Outcome

It is noteworthy, as mentioned by Reuters, that EU penalties can reach up to 10% of a company's revenue. However, Corning has successfully avoided any fine. In a statement to Bloomberg, Corning asserted that the European Commission's inquiry concluded without penalties or a declaration of misconduct by Corning, and without causing any substantial effect on the operations of their Gorilla Glass product or the company in general.