Bayer sued for allegedly monopolizing US market for GMO corn seeds
Bayer, opens new tab used illegal and anti-competitive practices to
monopolize the U.S. market for genetically engineered corn seeds, reaping
"hundreds of millions, if not billions, of ill-gotten dollars," according to a
federal lawsuit that adds to legal troubles plaguing the Germany-based company.
The lawsuit filed by Latham Quality, a family-owned seed company based in Iowa,
targets the highly concentrated U.S. seed industry as President Donald Trump has
said his administration will address risks from anti-competitive behavior in
food supply chains.
The Department of Justice said last week, that Bayer removed potentially
anti-competitive provisions from a loyalty program for independent seed
companies that license its technology to produce seeds.
U.S. crop farmers have struggled with high costs of seeds, fuel and fertilizer,
and are facing a fourth straight year of shrinking margins.
Latham alleged Bayer raised costs for farmers and independent seed companies by
controlling the market for corn seeds engineered to resist
its widely used weedkiller Roundup, according to its lawsuit filed in
the U.S. District Court for the Eastern District of Missouri.
The civil lawsuit, which was filed last month and made public on Tuesday,
proposed a class action and sought treble damages that Latham and similar
companies allegedly sustained, according to court documents.
"Bayer has the power to control market prices and exclude competition," the
lawsuit said. "In fact, it does so."
Bayer, which acquired U.S. seed producer Monsanto in 2018, said on Wednesday it
believes the allegations lack merit and that it will respond to them in court.
The company said it competes fairly in all facets of its agricultural business
and was in compliance with applicable laws.
"The crop input and corn seed markets are competitive, fair and diverse," Bayer
said.
Bayer is already facing thousands of other lawsuits alleging that Roundup causes
cancer.
The new lawsuit said Bayer sought to prevent competitors from developing
generic versions of corn seeds known as NK603,
which Bayer controls. Nearly all genetically engineered hybrid corn seeds sold
in the U.S. carry the NK603 trait that resists Roundup, according to the
complaint.
The U.S. government estimates that about 92% of corn acres are produced with
herbicide-tolerant seeds.
Demand for NK603 has remained significant since Bayer's
last patent on it expired in 2022, yet no viable competition has emerged,
the lawsuit said.
"This is the direct result of Bayer's anti-competitive conduct to maintain its
monopoly," the complaint said.
Bayer prohibited independent seed companies from using its genetic seed material
to develop a competing generic corn product even after
the patent on NK603 expired, according to the lawsuit.
Bayer, which also has a large pharmaceutical business, continued to charge
royalties on seed grown from its genetic material to companies like Latham and
raised licensing fees, the lawsuit said.
Latham licensed from Bayer or Monsanto the right to
include NK603 in corn seeds that Latham produced and distributed to
farmers. Latham then started working on its own corn seeds that would have
competed with Bayer's products, prompting a warning from a Bayer representative
to "stay 100% loyal to Bayer," according to the lawsuit.
When Latham did not stop its efforts, sales representatives for Bayer brands
retaliated by using non-public information to steal the company's business,
leaving Latham on the verge of bankruptcy, the lawsuit said.
"Unfortunately, many independent companies are going out of business as these
multinational companies have become more powerful and frankly predatory," John
Latham, president of Latham Quality, told a U.S. Senate Judiciary Committee
hearing on competition in the seed and fertilizer sectors in October.
In the first quarter, Bayer reported earnings in its Crop Science unit, which
includes seeds, jumped 17.9% to 3 billion euros ($3.49 billion).
($1 = 0.8601 euros)