EC pursues Corning for exclusivity obligations - and no-challenge clauses - in relation to Gorilla Glass

Yesterday (6 November 2024)  the European Commission (EC) issued an unusually detailed press release announcing the formal opening of an investigation (here).  

The target of the investigation is Corning, the producer of ‘Gorilla Glass’ a specific type of break-resistant glass used in mobile phones, tablets and smart watches (alkali-aluminosilicate or Alkali-AS glass).  The EC is investigating whether Corning has abused a dominant in the worldwide market for such glass.

The main allegations relate to various exclusivity/loyalty provisions in Corning's agreements with OEM producers of mobile phones and raw glass finishers.  In particular:

• exclusive purchasing/sourcing obligations;
• rebates linked to exclusive sourcing obligations; and
• so-called ‘English clauses’ – obligations on OEMs to give Corning notice of alternative offers from competing glass suppliers and the opportunity to match those offers.

This is fairly standard stuff. Provisions of this type are considered presumptively unlawful when entered into by a dominant undertaking.

Interestingly, the also EC singles out the inclusion of ‘no challenge’ clauses in Corning's agreements with finishers – clauses that prevent finishers from challenging Corning's patents.  The EC's view that absolute prohibitions on patent challenge are generally unlawful – and even rights to terminate on challenge are only likely to be lawful in the context of exclusive licenses – is well established.  However, enforcement action in this area is extremely unusual.  It will be interesting to see if there are any specific facts in this case that have attracted attention to this issue, if and when a final decision emerges.

More generally, this announcement seems of a piece with the increasing focus on innovation and innovative products in EC's enforcement practice.