FTC Files Corteva and Syngenta Class Action Complaint
The Lyon Firm is investigating claims that Syngenta and Corteva may have violated state and federal antitrust laws by limiting competition.
Any farmers or distributors who have participated in loyalty programs and bought pesticides from Syngenta and Corteva should contact the firm for more information about ongoing class action lawsuits.
The Federal Trade Commission (FTC) and ten state attorneys general have filed a class action complaint against pesticide manufacturers Syngenta Crop Protection and Corteva, Inc. for allegedly paying distributors to block competitors from selling cheaper alternative products to farmers.
The complaint alleges that Corteva and Syngenta have loyalty programs in which distributors only get paid if they limit business with pesticide competitors. By limiting competition, the defendants can inflate their prices and force farmers to spend more for their products.
The complaint filed by the Justice Department aims to eliminate such “pay-to-block” schemes and restore competition to the agricultural market.
The FTC alleges Syngenta and Corteva have created monopolies through harmful and illegal tactics and “deprived farmers of cheaper and more innovative options.”
The FTC complaint outlines the two pesticide manufacturers’ efforts to artificially, and perhaps illegally, extend their patent advantages. Usually when a pesticide patent expires after 20 years, generic versions of the product enter the market to compete with the original brand-name product. The generics push prices down and many other manufacturers can compete for farmers’ business.
Syngenta and Corteva, however, set up loyalty programs in which they make payments to distributors and in exchange the distributors keep their purchases of competing generic pesticides beneath a certain threshold. Distributors, therefore, pass along inflated prices to farmers and eventually pass higher costs on to consumers.
The class action complaint alleges the following ways in which these “loyalty” programs harm farmers, smaller pesticide manufacturers, and consumers:
- Increasing costs for farmers: By limiting generic products, Syngenta and Corteva maintain artificially high prices for their pesticides even after their patents have expired.
- Higher prices for consumers: Rising farming costs are eventually passed along to end consumers.
- Suppressing competition: The loyalty payment program clearly deters distributors from doing business with smaller, generic pesticide manufacturers. Even newer, innovative mixtures of pesticides that could compete with existing products do not get fair treatment.
The FTC pesticide complaint is part of a nationwide campaign to encourage competition and innovation in economy, protect consumers, and crack down on unfair corporate tactics.
Contact The Lyon Firm to discuss the Corteva and Syngenta loyalty program case, or other potential anti-competition corporate behaviors.