The Federal Trade Commission and 10 state attorneys general have sued Syngenta Crop Protection and Corteva for paying distributors to block competitors from selling "cheaper generic products" to farmers.
The complaint, filed Thursday in the U.S. District Court for the Middle District of North Carolina, claims both companies use "loyalty programs" to force distributors to limit business with competing pesticide manufacturers. The companies are then able to raise the prices for their products, FTC alleges.
"By paying off distributors to block generic producers from the market, these giants have deprived farmers of cheaper and more innovative options," FTC Chair Lina Khan said in a release.
"Multiple generic manufacturers that have assessed the competitive landscape ... have concluded that entry is not economically feasible due to the artificial constraints created by applicable Syngenta or Corteva loyalty programs," the complaint says.
The lawsuit's "primary focus" is on loyalty programs involving three Corteva active ingredients – rimsulfuron, oxamyl, and acetochlor – and three Syngenta AI's – azoxystrobin, mesotrione, and metolachlor.
The lawsuit accuses the two companies of violating federal antitrust law by "using unfair methods of competition, unlawfully conditioning rebates on the exclusion of competitive products, unreasonably restraining trade, and unlawfully maintaining monopolies." It also says they violated state competition and consumer protection laws in California, Colorado, Illinois, Iowa, Indiana, Minnesota, Nebraska, Oregon, Texas and Wisconsin.
Syngenta called FTC's complaint "contrary to the facts" and "without merit." It said the discounts are part of a "voluntary and industry-standard program" that the company and other crop protection companies have used for decades.
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"This program is only one of several incentive programs offered by Syngenta in the U.S., and we are disappointed that the FTC has failed to appreciate the beneficial effects that these rebate programs provide to our channel partners and to growers," Syngenta's statement said.
A Corteva spokesperson said the company believes there is "no basis" for the FTC's complaint. Its customer marketing programs "are fully compliant with the antitrust laws and are, in fact, pro-competitive programs that benefit both channel partners and farmers," the spokesperson said.
"As a U.S.-based innovator of crop protection products, this case threatens the pro-competitive investments that Corteva makes and that growers rely on to protect America's crops," the spokesperson said. "We are confident that we will prevail in this litigation and that there is no basis for the FTC's complaint."
Four commissioners voted to approve the complaint, while Commissioner Noah Joshua Phillips recused himself, the FTC's statement said.
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