Corning is offering a bundle of commitments in an effort to settle the EU antitrust investigation

After the European Union opened a competition investigation into Corning earlier this monthCiting concerns about alleged exclusive dealings, the manufacturer of Gorilla Glass has offered a series of changes to its contract clauses to settle the investigation.

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

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

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

Exclusivity trading, purchasing quotas and patent enforcement in the context

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

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 its own company. It is also promising that it will not offer device manufacturers price advantages that are dependent on such requirements.

For the combined demand of both non-EEA OEMs for Alkali-AS glass and transparent glass-ceramics (also called “clear glass-ceramics”) and their total demand for lithium aluminosilicate glass (LAS glass) or clear glass-ceramics, it proposes not to do so . require device manufacturers to purchase more than 50% of their respective demand from Corning or ensure that their supply chain does so. In addition, under the proposal, Corning will not offer OEMs price benefits contingent on such requirements.

Another proposal targets external companies that process raw glass (also called finishers). Corning offers not to require finishers to purchase more than half of their combined demand for sodium aluminosilicate glass (NAS Glass), LAS Glass and clear glass ceramics from Corning; nor to link price benefits to such purchasing requirements.

In addition, it offers not to require – in any other way – that finishers concentrate more than 50% of this combined demand at Corning.

“This means that finishers are free to decide on the amount of different cover materials (NAS Glass, LAS Glass or clear glass ceramic) they want to purchase from Corning to meet this overall limit,” the European Commission report said. press release a summary of Corning’s offering.

Further commitments relate to the enforcement of patents that Corning holds for shatter-resistant cover glass. She has offered to base a claim on this only on patent infringement, and not on breach of contract. It will also not use contractual mechanisms (such as fines) to enforce patent claims, as stated in the proposal.

As part of the proposal, Corning also commits to communicating with device manufacturers and finishers to explain the changes in terms of business, including in English and Chinese Mandarin.

Corning, maker of toughened Gorilla Glass for phones, is facing an EU antitrust investigation