Key Points

• Corning has established a monopoly in the global market for aluminosilicate glass screens used in consumer electronics, supplying major smartphone manufacturers including Samsung, Oppo, Google, and Sony.
• The European Commission has launched an investigation into Corning’s alleged anticompetitive conduct, specifically the use of exclusive dealing clauses and rebates that prevent or penalize OEM customers from purchasing glass from rivals.
• Corning has already offered commitments to waive exclusive dealing clauses globally, suggesting the company recognizes the strength of the antitrust case against it.
• Our analysis reveals Corning charges premium prices compared to competitors, while maintaining a dominant 72% market share in the aluminosilicate glass market for electronic devices.
• We estimate US consumer damages from Corning’s conduct to range between $177-210 million over a four-year period and $221-263 million over a five-year period.
• Damages for European consumers are in the region of €112 ~ €133 million over a four-year period.

The Glass Industry and Corning’s Position

Aluminosilicate glass is a specialized material known for its hardness, impact resistance, and scratch resistance, making it ideal for smartphone and tablet displays. Though several manufacturers produce this type of glass, Corning’s Gorilla Glass dominates the market, appearing in devices from nearly all major OEMs except Apple (which uses Corning’s exclusive Ceramic Shield glass).¹

Major Glass Types in Consumer Electronics

The consumer electronics display glass market includes several differentiated products:²

1. Aluminosilicate glass: The most common material for smartphone and tablet displays due to its durability. Produced by Corning, AGC, and Schott.
2. Ceramic Shield glass: A premium glass exclusive to Apple devices, produced by Corning through crystallization processes.
3. Soda-Lime glass: Lower quality glass sometimes used in budget electronic devices.
4. Other materials: Including sapphire glass and tempered glass, used in luxury applications or as screen protectors.³

Market Structure and Dominant Position

Our analysis indicates Corning’s dominance extends across the global smartphone market. Of the top global smartphone manufacturers, only two (Vivo and Huawei) do not use Corning’s glass. This gives Corning a 72% market share in the global aluminosilicate glass market for electronic devices, which would rise to 80% if Apple’s Ceramic Shield (also manufactured by Corning) were included.⁴

Corning’s main competitors—Schott (producing Xensation glass)⁵, AGC⁶ (producing Dragontrail glass)⁷, and smaller players like Avanstrate—cannot effectively challenge Corning’s dominant position due to long-term exclusive contracts.⁷

The European Commission Investigation

In November 2024, the European Commission (EC) opened an investigation into Corning’s potential abuse of its dominant position in the aluminosilicate glass market.⁸ The EC identified several concerning practices:

1. Exclusive deals and rebates: Corning’s contracts require customers to source all their glass from Corning or face penalties through higher prices.⁹
2. No-challenge clauses: Contractual terms prevent customers from challenging Corning’s patents.

In a significant development, Corning has already offered to waive all exclusive dealing clauses in its current agreements with OEMs and finishers worldwide, committing not to use such clauses in future agreements for a period of nine years.¹⁰ While these commitments don’t constitute an admission of liability, they suggest Corning recognizes the strength of the EC’s case.

Market Definition and Monopoly Power

Source: Fideres Analysis of StatCounter data

Product Market Definition

The relevant product market is aluminosilicate glass for electronic devices. Using the hypothetical monopolist test (HMT), we conclude that a SSNIP (small but significant non-transitory increase in price) would not cause sufficient switching to alternative products like soda-lime glass or tempered glass.¹¹

This market definition excludes Ceramic Shield glass, which is exclusively available to Apple through its partnership with Corning, meaning other OEMs cannot substitute to it.¹²

Geographic Market Definition

Our analysis indicates the geographic market is global. If faced with a SSNIP from a glass supplier in one region, OEMs could and would switch to suppliers in other regions, provided the product quality remained consistent.¹³

Anticompetitive Conduct and Theory of Harm

Corning’s dominance in aluminosilicate glass has enabled it to impose exclusivity requirements and penalties on customers who source glass from competitors. This conduct restricts competition in three key ways:

1. Foreclosing potential competition: OEMs cannot purchase even a portion of their glass requirements from rival suppliers without facing significant penalties.
2. Removing credible threats of switching: OEMs lose the ability to credibly threaten to switch portions of their purchases to rivals, which would otherwise push prices down.
3. Restricting customer choice: Customers must choose to switch all or none of their purchases away from Corning, effectively preventing any switching since the non-contestable portion cannot be sourced elsewhere.

This anticompetitive conduct harms three groups:

• Direct purchasers: OEMs pay higher prices for glass.
• End consumers: Higher glass costs are passed on to smartphone and tablet purchasers.
• Competitors: Rival glass manufacturers lose sales despite offering more favorable terms.

Consumer Damages Assessment

Our analysis reveals that Gorilla Glass is consistently more expensive than rival brands.¹⁴ We examined replacement costs for models sold by the same OEM but using different glass types, confirming significant price disparities:

Source: Fideres Analysis

To calculate damages to US consumers, we estimated the volume of commerce of Gorilla Glass using two approaches:

1. 1. Based on Corning’s earnings calls attributing approximately $2 billion in global mobile glass revenues (2021)¹⁵
   2. Based on Mizuho Bank estimates of $1,136 million for Gorilla Glass global revenues (2024)¹⁶

Applying a 10% overcharge scenario and focusing on the US market (estimated at 46.3% of global revenue),¹⁷ we calculate damages between $177-210 million for 2021-2024. Including a pre-judgment run-off period (5 years total), damages would range between $221-263 million.

Source: Fideres Analysis of Corning and Bloomberg Data

Following the same methodology, we calculate damages for European consumers. Total damages are estimated between $128 and $152 million (€112 ~ €133 million) for a four year period.

Source: Fideres Analysis of Corning and Bloomberg Data

Pass-Through to Consumers

We estimate 90-100% of the overcharge is passed on to final consumers. Multiple studies by competition authorities confirm that industry-wide cost pass-through rates between wholesale and retail stages are typically high, often above 80%.¹⁸ Our research draws on studies showing long-run industry-wide pass-through rates ranging from 72% to 165%, with most in the 80-100% range.

Conclusion

Corning has exercised its monopoly power in the aluminosilicate glass market to impose anticompetitive exclusive dealing arrangements, foreclosing competition and resulting in higher prices for OEMs and ultimately consumers. The European Commission’s investigation and Corning’s swift offer of commitments suggest the strength of the antitrust case.

Our analysis estimates significant damages to US consumers, ranging from $177-263 million depending on the time period considered. Given the high pass-through rates in the industry, this presents a compelling case for end purchaser class action complaints.

¹ corning_at_a_glance.pdf

² Display Glass Market Research Report 2032

³ https://www.gsmarena.com/kyocera_duraforce_pro_2-9407.php

⁴ Xensation® | SCHOTT

⁵ Aluminosilicate Glass vs Gorilla Glass

⁶ What is Dragontrail Glass & List of Smartphones using it

⁷ Company profile – Company information | AvanStrate Inc.

⁸ IP_24_5681_EN.pdf

⁹ https://www.concurrences.com/en/dictionary/fidelity-rebates and Fidelity Rebates (OECD, 2016)

¹⁰ 2024-11-25_L1EOCELJ0IU7IM7H/Corning+IP_24_6061_en.pdf

¹¹ bodyguardz.com/blog/5-things-to-know-about-aluminosilicate-glass.html

¹² Apple was Granted Two Major Patents Today that came to Life with the iPhone 12: MagSafe Charging and Ceramic Shield – Patently Apple

¹³ See how Schott, a Corning competitor, sells globally: Annual Report | SCHOTT

¹⁴ https://customglassmfg.net/blog/dragontrail-glass-vs-gorilla-glass/

¹⁵ See Corning Q4 2021 Earnings Call, see https://www.fool.com/earnings/call-transcripts/2022/01/26/corning-glw-q4-2021-earnings-call-transcript/.

¹⁶ Mizuho Securities USA, Industrial Research, Corning Incorporated, May 7, 2024.

¹⁷ We first look at Samsung share of smartphone sales by country, with the US accounting for approximately 36%. We then estimated the share of flagship Samsung phones attributable to the US (to exclude cheaper version that might be more popular in emerging markets), leading to a 57% share (values from AppBrain). Averaging the two, to be conservative, leads to 46.3%.

¹⁸ Microsoft Word – 524 OFT Cost Pass-Through Final R.docx (publishing.service.gov.uk) pp. 26-28.