Kansas City, Missouri
August 26, 2004
Monsanto Company's domination of the biotech crop market is
indisputable.
The company controls 100 percent
of the market for certain specialized soybean and corn seeds
that help farmers fight weeds, along with more than 80 percent
of the market for a corn that resists destructive insects. In
all, Monsanto corn and beans strains are planted annually on
more than 70 million acres of U.S. farmland.
No other competing agroscience company even comes close to
matching market share with Monsanto. It's an accepted reality in
farm country, where Monsanto's dominance has allowed it to
command steep prices.
But is it illegal?
That is the question raised in a lawsuit filed last month by
Basel, Switzerland-based Syngenta, the world's biggest
agrichemicals company and bitter Monsanto rival.
The lawsuit alleges that since the 1990s, Monsanto has
"maintained and increased its monopoly power in multiple markets
through a series of coercive tactics and exclusive dealing
arrangements designed to keep out all competition."
The petition, filed in U.S. District Court in Delaware, says
Monsanto has set up unfair "bundling" deals that induce seed
companies to make sure sales across all product lines are at
least 70 percent Monsanto brands.
It alleges Monsanto has built up control over a majority of the
foundation corn seed market in the United States and then
structured deals with seed companies that sharply limit the
ability of competitors to access enough foundation seed to bring
new biotech traits to market.
"There are all these hurdles in front of us that we have to jump
over in order to compete," said Syngenta in-house counsel Ed
Resler. "How does a company like Syngenta compete with a
monopolist like Monsanto?"
Monsanto has not yet filed a response to the petition.
Spokeswoman Lori Fisher said Syngenta's claims are without
merit, and Monsanto "will vigorously defend against these
allegations."
Experts in anti-trust say the boundaries for what is considered
unlawful monopolistic behavior have yet to be clearly
established, especially in cases involving intellectual property
rights, and the Monsanto case has the potential to break new
ground.
"It may well be the case that defines the relationship between
antitrust law's commitment to open markets and intellectual
property law's commitment to exclusive rights," said Peter
Carstensen, a University of Wisconsin law professor who has
testified before Congress on agriculture and anti-trust
concerns.
Carstensen and other legal experts said the allegations of
bundling are particularly troubling.
"The rule is that tying a product is which you don't have market
power to a product in which you do have market power is unlawful
under some circumstance," said Michael Stumo, general counsel
for the Organization for Competitive Markets.
© Reuters 2004 |