Antitrust Suit Filed Against Monsanto for Alleged Monopolization of Glyphosate Herbicide Market

September 26, 2006 | Roger McEowen

 

A federal class-action anti-trust lawsuit has been filed against Monsanto on the basis that Monsanto monopolizes the glyhphosate herbicide market by coercing dealers and growers into using its product, Roundup, and limiting sales of the product’s generic form. The plaintiff, Pullen Seeds and Soils of Sac City, Iowa, is a licensed grower of genetically modified corn and soybeans containing Monsanto’s glyphosate-tolerant seed traits. They also sell Monsanto’s genetically-modified seeds. In the suit, Pullen claims that Monsanto charges 300-400 percent more for Roundup than its generic equivalent because of the extent of its control of the U.S. glyphosate market (approximately an 80 percent market share) and a similar share of the market for “Roundup Ready” seeds. The suit claims that 40 percent of Monsanto’s $5 billion sale in 2000 (the key year at issue in the case because it is the year Monsanto’s patent for Roundup expired) came from Roundup. Pullen claims that Monsanto was able to maintain its post-patent market share by acquiring seed companies that were developing modified seed technology, eliminating those projects that could have led to the development of genetically modified seeds that could be used with non-glyphosate herbicide, and entering into exclusive dealing licenses with seed companies and dealers that denied actual and potential competitors access to critical developmental, marketing and distribution channels. In addition to the exclusive dealing requirements with its seed company licensees, Pullen claims that Monsanto has used various types of bundled rebates to ensure that seed companies produce and sell seed containing Monsanto’s seed traits virtually exclusively. Pullen is seeking declaratory and injunctive relief for Monsanto’s alleged violation of Sections 1 and 2 of the Sherman Antitrust Act, and treble damages under Iowa antritrust law for the overcharges Pullen and other class members have paid. The number of class members is estimated to exceed 100,000 nationally and 1,000 in Iowa. Pullen Seeds and Soil v. Monsanto Company, No. 06-599 (D. Del. filed Sept. 26, 2006). 

PullenVMonsanto.pdf