iPhone Glass Supplier Corning Faces EU Antitrust Probe

[bsolar]

I can assure you, Apple is not being forced to use Corning’s product. Apple wants to use the product and wants a better price. Corning says, “I’ll give you a better price if you..” and before they complete the sentence, Apple’s tossing buckets of money shouting “JUST TAKE THE MONEY1!”

Apple and Corning's deals can be perfectly legal whereas Corning's deals with another customer might be not.

There’s little competition because it’s hard to do what Corning does without invalidating Corning’s patents.

If there is little competition in the market due to significant barriers to entry the concerns of antitrust regulators are justifiably increased and some practices that might be ok in a very competitive market might cross the line in a less competitive one.

And, JUST like with the App Store, the agreements Corning has currently HAD TO BE APPROVED BY THE EU! The EU reviewed the contracts and said everything was ok. Corning, of course, went forward because the EU said “ok”, then Vestager comes along and reneges on those prior agreements.

Where do you get the information that the EU reviewed and approved Corning's contracts with their customers?

Furthermore, the EU only announced that an investigation was started, they have not claimed that they established any kind of violation yet. The fine print in the announcement explicitly states such.

The point of an investigation is to figure out if there is a case and if there is a case they will present evidence supporting it. Until then there is no information we can use to make a founded argument as of whether the allegations are founded or not.

 

[ProbablyDylan]

The iPhone is designed in America and assembled in China. What business is it of the EU what suppliers are used when all this is taking place beyond their borders? Is there some EU-based company who is being shut out of contracts and has to go running to the government and crying mommy?

Where does the article mention the iPhone, aside from Corning being the manufacturer of the glass for it?

Fact is that Corning makes glass for more companies than just Apple. It's very likely that some of these other customers are in the European Union. I know this is an Apple-centric forum, but they are far from Corning's only customer.

 

[ProbablyDylan]

Which EU company makes mobile phones, in the EU?

Fairphone is Dutch. I know they don't move millions of units year over year but they exist - it's silly to pretend that Europe has zero domestic tech companies. They're just the one I'm aware of as a silly American.

 

[AppliedMicro]

it is the EU itself. They are creating a business hostile environment with their socialist like policies.

The European Union takes no problem issue with private ownership of manufacturing companies (like Corning). The allegation of socialism is therefore baseless.

What they do take issue with is companies stifling competition through anticompetitive conduct. Such attempted monopolisation is bad for competition, consumers and innovation - much like socialism.

Eventually the EU regulators will succeed in stiffling innovation

Anticompetitive conduct by dominant companies has got nothing to do with innovation.

They’ve put years and years (very likely aided by government grants/subsidies/tax credits) into making a product and continually improving that product. Companies use Corning because they obtain test samples, run those tests and confirm that it performs as well as expected or better.

If they’re making such a superior product, they don’t need to quash the competition through anticompetitive exclusivity contracts.

By the way, Vestager lost her position because even the EU thought she was going too far.

Vestager has been - and still is - European Commissioner for competition since 2014.

👉 What are you talking about?!

And, JUST like with the App Store, the agreements Corning has currently HAD TO BE APPROVED BY THE EU! The EU reviewed the contracts and said everything was ok. Corning, of course, went forward because the EU said “ok”

Corning’s glass supply contracts with its customers had to be approved by the EU?
”Just like the App Store”?

👉 Again: What are you talking about?!

 

[jz0309]

Fairphone is Dutch. I know they don't move millions of units year over year but they exist - it's silly to pretend that Europe has zero domestic tech companies. They're just the one I'm aware of as a silly American.

Did I say EU has no tech companies?
Making this claim by you is the one that is silly

 

[jz0309]

Where does the article mention the iPhone, aside from Corning being the manufacturer of the glass for it?

Fact is that Corning makes glass for more companies than just Apple. It's very likely that some of these other customers are in the European Union. I know this is an Apple-centric forum, but they are far from Corning's only customer.

The EU statement specifically says “smartphones”, nothing else

 

[ProbablyDylan]

The EU statement specifically says “smartphones”, nothing else

The EU Statement actually says

The European Commission has opened a formal investigation to assess whether Corning may have abused its dominant position on the worldwide market for a special type of glass that is mainly used to protect the screens of handheld electronic devices, such as mobile phones.

Giving mobile phones as a not-exclusive example. Even if the investigation only pertained to smartphones there are European smartphone companies, like the Dutch Fairphone. Funny enough - they also use Corning's Gorilla Glass for their displays, indicating they could be victims of Corning's anticompetitive behavior.

Did I say EU has no tech companies?

No, but that appears to be the general sentiment when the EU is so much as mentioned in these forums. I was simply commenting on that. Nothing personal.

 

[AppliedMicro]

There’s been a long dispute between Qualcomm and Apple with Apple saying (in simple terms) that QCOM is charging too high a license fee for their modems - shouldn’t the EU get involved in this? One can assume that we as customers pay for that license fee and thus lower fee would result in lower price for an iPhone? Can’t wait for the EU to get involved in that…

They already did. More than once.
Albeit at least once, funnily enough, for their pricing being too low:

https://ec.europa.eu/commission/presscorner/detail/el/ip_19_4350
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:62019TJ0671

But here you go:

“The European Commission has fined Qualcomm €997m for abusing its market dominance in LTE baseband chipsets. Qualcomm prevented rivals from competing in the market by making significant payments to a key customer on condition it would not buy from rivals. This is illegal under EU antitrust rules
(…)
Qualcomm paid billions of US Dollars to a key customer, Apple, so that it would not buy from rivals. These payments were not just reductions in price – they were made on the condition that Apple would exclusively use Qualcomm's baseband chipsets in all its iPhones and iPads.”

Antitrust: Commission fines Qualcomm €997 million for abuse of dominant market position

The European Commission has fined Qualcomm €997m for abusing its market dominance in LTE baseband chipsets. Qualcomm prevented rivals from competing in the market by making significant payments to a key customer on condition it would not buy from rivals. This is illegal under EU antitrust rules.

ec.europa.eu

 

[I7guy]

The European Union takes no problem issue with private ownership of manufacturing companies (like Corning). The allegation of socialism is therefore baseless.

What they do take issue with is companies stifling competition through anticompetitive conduct. Such attempted monopolisation is bad for competition, consumers and innovation - much like socialism.

[…]

we agree. The EU is creating a hostile environment with socialist like policies for business.

 

[AppliedMicro]

The EU is creating a hostile environment with socialist like policies for business.

There’s nothing “socialist” in encouraging and ensuring healthy and fair competition between privately owned companies.

The word “socialist” merely seems to be a loosely used derogatory term to you, used for economic policy and regulation you don’t agree with. (Although such catch-all usage seems to be quite popular among right-leaning populist politicians and news media in America. Now, there’s nothing inherently wrong with leaning right in politics, but they sure do not adhere to the original meaning of socialism when branding something as “socialist”).

 

[jz0309]

They already did. More than once.
Albeit at least once, funnily enough, for their pricing being too low:

https://ec.europa.eu/commission/presscorner/detail/el/ip_19_4350
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:62019TJ0671

But here you go:

“The European Commission has fined Qualcomm €997m for abusing its market dominance in LTE baseband chipsets. Qualcomm prevented rivals from competing in the market by making significant payments to a key customer on condition it would not buy from rivals. This is illegal under EU antitrust rules
(…)
Qualcomm paid billions of US Dollars to a key customer, Apple, so that it would not buy from rivals. These payments were not just reductions in price – they were made on the condition that Apple would exclusively use Qualcomm's baseband chipsets in all its iPhones and iPads.”

Antitrust: Commission fines Qualcomm €997 million for abuse of dominant market position

The European Commission has fined Qualcomm €997m for abusing its market dominance in LTE baseband chipsets. Qualcomm prevented rivals from competing in the market by making significant payments to a key customer on condition it would not buy from rivals. This is illegal under EU antitrust rules.

ec.europa.eu

Back then, in the LTE/4G timeframe there were some notable EU competitors to QCOM, Infineon, Ericsson come to mind, so it seems that some EU companies were impacted.
Move to this week - who are the EU competitors in the mobile device space, the consumer space? Someone mentioned Fairpjone which honestly I have never heard of, which other EU mobile device maker would be impacted by the alleged Amit competitive behavior of Corning?

 

[AppliedMicro]

which other EU mobile device maker would be impacted by the alleged Amit competitive behavior of Corning?

Regardless of that, they’re arguing that consumers are being impacted:

”thereby reducing customer choice, increasing prices, and stifling innovation to the detriment of consumers worldwide.”

Commission opens antitrust investigation into possible anticompetitive practices by Corning over cover glass for electronic devices\t

The European Commission has opened a formal investigation to assess whether Corning may have abused its dominant position on the worldwide market for a special type of glass that is mainly used to protect the screens of handheld electronic devices, such as mobile phones.

ec.europa.eu

Referring back to your earlier post:

So yes, if a EU company is indeed impacted, then yes, EU commission can investigate.

Since EU consumers may be impacted, they investigate.

 

[bsolar]

There’s nothing “socialist” in encouraging and ensuring healthy and fair competition between privately owned companies.

The word “socialist” merely seems to be a loosely used derogatory for economic policy and regulation you don’t agree with.

Depends on how deep in the rabbit hole one wants to go.

The foundation of anti-trust regulation is the concept that an unregulated free-market naturally devolves due to the formation of companies strong enough to distort competition. While this concept is pretty much universally accepted, some people fundamentally disagree with that notion and consider it a fallacy.

What those people believe instead is that an unregulated free-market would not naturally devolve and it only devolves due to the government becoming a player in the market. They argue that it's government intervention that causes the distortions, e.g. by advantaging companies through subsidies, establishing legal monopolies or owning companies (so, socialism).

IMHO there is plenty of evidence that free-markets naturally devolve, but to everyone their opinion I guess.

 

[jz0309]

Regardless of that, they’re arguing that consumers are being impacted:

”thereby reducing customer choice, increasing prices, and stifling innovation to the detriment of consumers worldwide.”

Commission opens antitrust investigation into possible anticompetitive practices by Corning over cover glass for electronic devices\t

The European Commission has opened a formal investigation to assess whether Corning may have abused its dominant position on the worldwide market for a special type of glass that is mainly used to protect the screens of handheld electronic devices, such as mobile phones.

ec.europa.eu

Referring back to your earlier post:

Since EU consumers may be impacted, they investigate.

So, with that argument, you would support the US trade commission (or whoever) to investigate a German manufacturer that sells consumer goods at a seemingly too high price (because of alleged antitrust behavior) for US consumers, and fine them?

 

[ProbablyDylan]

So, with that argument, you would support the US trade commission (or whoever) to investigate a German manufacturer that sells consumer goods at a seemingly too high price (because of alleged antitrust behavior) for US consumers, and fine them?

Price isn't the issue, though. Anticompetitive sales terms are.

And yes, if a German conglomerate were price gouging Americans, I would be in favor of an FTC probe.

 

[Johns12]

This was quoted above as to the actual wording of the case:

"The European Commission has opened a formal investigation to assess whether Corning may have abused its dominant position on the worldwide market for a special type of glass that is mainly used to protect the screens of handheld electronic devices, such as mobile phones."

I take this to not just mean smartphones.

 

[jz0309]

Price isn't the issue, though. Anticompetitive sales terms are.

And yes, if a German conglomerate were price gouging Americans, I would be in favor of an FTC probe.

well this question was of course hypothetical, but in general I disagree.
As I stated earlier, imho the EU has no right to get involved in non-EU companies sourcing/manufacturing/assembly activities, that's the job of the appropriate local authorities.

 

[ProbablyDylan]

As I stated earlier, imho the EU has no right to get involved in non-EU companies sourcing/manufacturing/assembly activities, that's the job of the appropriate local authorities.

Right. And as I stated earlier, there are companies based in the EU that are impacted by Corning's behavior. Fairphone is one of such companies.

I imagine the EU couldn't care less if an American company gets stuck in an anticompetitive deal with another American company. They're only bothering because EU companies may be caught up in them with Corning.

 

[Naraxus]

👉 Invent, innovate, make good products at good prices and compete!

Except that the EU can't make good products nor innovate to save their lives, hence the specious charges and retroactively invented fines.

The EU/Vestager like to punish other companies (primarily US companies) for their successes rather than trying to help EU Member companies compete and innovate.

 

[bsolar]

Except that the EU can't make good products nor innovate to save their lives, hence the specious charges and retroactively invented fines.

Except the Global Innovation Index places in the top 3 in the order: 1. Switzerland, 2. Sweden, 3. US.

Some might see the US being very prominent and innovative in some products and believe it means they are the most innovative overall in all possible fields, but there are fields like e.g. pharmaceutics where European countries dominate.

The EU/Vestager like to punish other companies (primarily US companies) for their successes rather than trying to help EU Member companies compete and innovate.

The EU (and antitrust in general) have no issue in companies being successful: they have issue in successful companies employing anti-competitive tactics to stifle competition from other companies.

 

[I7guy]

Except the Global Innovation Index places in the top 3 in the order: 1. Switzerland, 2. Sweden, 3. US.

Some might see the US being very prominent and innovative in some products and believe it means they are the most innovative overall in all possible fields, but there are fields like e.g. pharmaceutics where European countries dominate.

And here I thought the US dominated in pharma.

The EU (and antitrust in general) have no issue in companies being successful: they have issue in successful companies employing anti-competitive tactics to stifle competition from other companies.

The issue seems to be across multiple threads and thousands of posts, standard business practice in the US is viewed as anti-competitive in the EU. And the EU tends to remedy that by making mine yours, for free.

 

[I7guy]

There’s nothing “socialist” in encouraging and ensuring healthy and fair competition between privately owned companies.

The word “socialist” merely seems to be a loosely used derogatory term to you, used for economic policy and regulation you don’t agree with. (Although such catch-all usage seems to be quite popular among right-leaning populist politicians and news media in America. Now, there’s nothing inherently wrong with leaning right in politics, but they sure do not adhere to the original meaning of socialism when branding something as “socialist”).

I"ll reiterate...that's exactly what the EU is doing. Was Apple compensated for any of the "features" they had to unlock?

 

[bsolar]

And here I thought the US dominated in pharma.

They are one of the largest importers as they consume a lot of pharmaceutical products, but not the largest producer.

The issue seems to be across multiple threads and thousands of posts, standard business practice in the US is viewed as anti-competitive in the EU. And the EU tends to remedy that by making mine yours, for free.

The EU has more strict anti-trust regulations for sure. Furthermore, in the EU typically there are stronger limitations on what can be contractually agreed between parties.

Whether that's good or not is a matter of opinion, but e.g. Disney's attempt to claim that they cannot be sued for wrongful death of a client in one of their restaurant because the client accepted the Disney+ EULA when signing for a 1 month trial years before and said EULA forces arbitration against Disney for all and every matter would not fly at all in the EU.

 

[I7guy]

They are one of the largest importers as they consume a lot of pharmaceutical products, but not the largest producer.

According to ChatGPT the US is the biggest producer in the world. If you are going to compare the EU to the US, it should be the EU to North America.

The EU has more strict anti-trust regulations for sure. Furthermore, in the EU typically there are stronger limitations on what can be contractually agreed between parties.

Whether that's good or not is a matter of opinion, but e.g. Disney's attempt to claim that they cannot be sued for wrongful death of a client in one of their restaurant because the client accepted the Disney+ EULA when signing for a 1 month trial years before and said EULA forces arbitration against Disney for all and every matter would not fly at all in the EU.

The Disney case is sad, it shouldn’t fly here either. But some of the other stuff is standard business practices which mostly are acceptable worldwide. Not taking distinct anticompetitive behavior.

 

[ProbablyDylan]

I"ll reiterate...that's exactly what the EU is doing. Was Apple compensated for any of the "features" they had to unlock?

Why would they be compensated for removing barriers that shouldn't be there? The police aren't paying me to fix my illegal window tint.