Apple Walks Away Unscathed As EU Forces Corning To Dismantle Exclusive Glass Deals, Opening The Door For Rivals And Shaking Up The Smartphone Supply Chain

The European Union has officially wrapped up its antitrust investigation against Corning’s Gorilla Glass business, and interestingly, Apple has been exempted from the new commitments Corning agreed to. If you are not familiar, the EU has been exploring and investigating Corning’s contracts with different companies that manufacture smartphones, tablets, and wearables over concerns of dominance in the alkali-aluminosilicate glass market. The regulations prevent unfair terms, including exclusive supply deals and minimum purchase requirements. These practices could harm the competition by locking device manufacturers into Corning’s ecosystem, excluding presence of competition or rivals in the glass market.

EU settlement preserves Apple’s custom glass deal while giving other manufacturers more freedom to choose competing suppliers

To avoid any hefty fines that might be imposed, up to 10 percent of its global revenue, Corning has set up some remedies in place, which will allow it to operate without sacrificing a chunk of its earnings. Corning has decided to remove the exclusivity clause from its contracts and also eliminate the minimum purchase obligations in the European Economic Area. It has also implemented a global limitation that will prevent manufacturers from ordering more than 50 percent of their glass orders from Corning. The company has also eradicated price incentives on minimum sourcing commitments, and all of these aforementioned changes will remain in place for nine years under independent monitoring.

Apple has been watching the entire ordeal from the sidelines, which means that it will not be impacted by any changes that might come into play. This is due to the fact that the EU has determined Apple’s glass components as custom-made, with unique compositions that fall outside of the investigation. The iPhone maker has retained its special arrangement with Corning, which supplies material like Ceramic Shield used on its smartphones and wearables.

While Apple is safe, so is Corning for the time being, as the settlement avoids any kind of fines from the EU and also boosts competition in the smartphone or wearable glass market. Moreover, manufacturers now also have more flexibility to choose their suppliers, giving them an edge in pricing and variety. The EU’s goal is to bolster healthy competition in the region with recognition of unique industry relationships, and by the end of the day, all parties have received what they desired: Apple continued its business with Corning uninterrupted, Corning avoided hefty fines, and healthy competition in the region, which was the entire purpose of the proposition from the EU.