Lack of Transparency in the Closing of DOJ’s Investigation into Monsanto’s Transgenic Seed Practices Disappoints Antitrust Advocates

Nov 21 2012

The American Antitrust Institute (AAI) expressed its disappointment in the closing of a high-profile antitrust investigation without any public statement by the U.S. Department of Justice Antitrust Division (DOJ). On November 16, the DOJ notified agricultural biotechnology developer, Monsanto, that it closed a lengthy investigation into the company’s competitive conduct involving transgenic (genetically modified) seed.

“Absent a public statement from the Antitrust Division, the public is in the dark about how the DOJ will pursue concerns involving intellectual property and competition in important markets,” said AAI Vice President Diana Moss. “This runs counter to the agency’s well-publicized goal of making competitive issues in agriculture a high and public priority.”

The DOJ investigation reportedly focused on Monsanto’s licensing practices for the herbicide-tolerant Roundup Ready™ (RR™) soybean traits.

The AAI has been an active participant in the debate over competitive issues involving transgenic seed, issuing two white papers and participating in the U.S. Department of Agriculture (USDA)/DOJ workshops on competition in agriculture. The AAI urged the DOJ to look into whether the agricultural biotechnology giant’s conduct falls within the legitimate scope of its patents, or whether it licenses its genetic traits in a way that controls competition, to the detriment of competition and consumers.

AAI has long advocated for antitrust enforcers to provide transparency to aid the public, industry, and policymakers. “In this case, transparency is vitally important,” said Moss. Monsanto is dominant in the market for the first-generation RR1™ soybean trait and transgenic seed is a critical commodity, both domestically and for the export market.

“Given the importance of the markets involved, we would have liked to see the Antitrust Division explain what types of conduct were investigated and why no charges or remedies were pursued,” Moss noted.

A key part of what makes transparency so important is the looming expiration in 2014 of Monsanto’s patent on its RR1™ soybean trait. That means there is an opportunity for innovators to develop a generic RR1™ trait -- a beneficial development that could provide farmers with more choice and lower prices. But without a comprehensive industry accord that includes terms under which rivals can access Monsanto’s RR1™ technology for research and development purposes before the patent expires, the window for generic competition may close.

Even if no violation of the antitrust laws was found by the DOJ, the AAI hoped for a public commitment by the agency to aggressive monitoring of Monsanto’s promises involving the transition to generic competition in RR1™ soybeans.

Media Contact:
Diana Moss, AAI
dmoss@antitrustinstitute.org
720-233-5971

About American Antitrust Institute:
The American Antitrust Institute is an independent Washington-based non-profit education, research, and advocacy organization. Our mission is to increase the role of competition, assure that competition works in the interests of consumers, and challenge abuses of concentrated economic power in the American and world economy. Our list of contributors is available upon request to aai@antitrustinstitute.org.