Corning, the US-based glass manufacturer behind Gorilla Glass, has vowed to end its exclusive deals and other practices that the European Commission deemed to be anti-competitive in order to avoid getting fined. If you’ll recall, the commission announced that it was investigating Corning last year, accusing it of squashing competition with its exclusive supply agreements, thereby driving up prices and stifling innovation. Now, the commission has accepted the commitments Corning offered and made them legally binding under the EU’s rules.
When the commission announced its investigation, it said Corning required mobile phone manufacturers to source all or nearly all of their Alkali-AS glass (marketed as Gorilla Glass) needs from the company, even ganting them rebates. Under its agreement with the commission, Corning has to “waive all exclusive dealing clauses in all its current agreements” with phone manufacturers and companies that process raw glass. Corning also won’t be allowed to enter exclusive deals in the future.
In addition, Corning can’t require manufacturers or any of their suppliers to purchase any quantity of Alkali-AS Glass from it in the European Economic Area. Worldwide, Corning can’t require manufacturers and their suppliers to purchase more than 50 percent of their needs from the company. Corning’s commitment will remain in force for nine years, and a trustee will monitor the company’s movements to ensure its compliance.
As Reuters has noted, EU fines could cost companies as much as 10 percent of their revenue, but Corning didn’t have to pay anything. “The European Commission’s investigation has been settled with no fine, no finding of wrongdoing by Corning, and no material impact to the company’s Gorilla Glass business or the company at large,” the Gorilla Glass-maker told Bloomberg in a statement.
