The pesticide industry is similar to the pharmaceutical industry in a number of ways, says the complaint for this class action: Both rely on patent protections, both have safety requirements, and in both, generics enter the market after patents have expired. But the complaint brings suit against pesticide companies Syngenta Crop Protection AG, Syngenta Corporation, Syngenta Crop Protection, LLC, and Corteva, Inc., alleging that they have created anticompetitive “loyalty programs” to suppress generics.
The class for this action is all persons or entities who, between January 1, 2017 and the present, bought pesticides in the US containing the active ingredients azoxystrobin,
mesotrione, metolachlor, rimsulfuron, oxamyl, or acetochlor.
The complaint begins by claiming, “In a 2018 survey, 80% of farmers reported their costs were increasing and they were unable to pay their debts…” Farmers, it implies, could therefore benefits from the lower prices of generics.
“Pesticides are crucial to crop management[,]” the complaint says, “as they enable farmers to grow safe, healthy food and to increase crop quality and yield. Each year, about 500 million kilograms (more than 1 billion pounds) of pesticides are used in the United States.”
Unfortunately, the complaint alleges, the Syngenta and Corteva companies—two of the largest pesticide makers—have set up loyalty programs with pesticide distributors involving sales of pesticides with certain active ingredients. These programs block the makers of generics from taking any significant portion of the market.
Under the loyalty programs, the complaint claims, Syngenta and Corteva make payments they call “rebates” to distributors according to how much Syngenta and Corteva product they buy—provided that they limit their purchases of generics. The distributors therefore restrict their business in generics and sometimes refuse to sell them at all. The companies “both reward participation in their loyalty programs and punish non-compliance.”
The complaint alleges that, to make this program work, Syngenta and Corteva “ensure that Distributors profit more from accepting [Syngenta’s and Corteva’s] ‘rebates’ payments than they would from distributing a higher volume of lower-priced, generic pesticides.”
In this way, the complaint contends, the companies “have restrained competition, maintained unlawful monopolies, and harmed America’s farmers, reducing choices for these farmers and costing them millions of dollars in overcharges.”
The Federal Trade Commission (FTC) has investigated the situation and on September 29, 2022, it filed a complaint against Syngenta and Corteva alleging that the loyalty programs shut out competition from generics and violate federal and state antitrust laws.
Article Type: LawsuitTopic: Antitrust
Most Recent Case Event
Syngenta, Corteva Anticompetitive “Loyalty Programs” Complaint
October 7, 2022
The pesticide industry is similar to the pharmaceutical industry in a number of ways, says the complaint for this class action: Both rely on patent protections, both have safety requirements, and in both, generics enter the market after patents have expired. But the complaint brings suit against pesticide companies Syngenta Crop Protection AG, Syngenta Corporation, Syngenta Crop Protection, LLC, and Corteva, Inc., alleging that they have created anticompetitive “loyalty programs” to suppress generics.
Syngenta, Corteva Anticompetitive “Loyalty Programs” ComplaintCase Event History
Syngenta, Corteva Anticompetitive “Loyalty Programs” Complaint
October 7, 2022
The pesticide industry is similar to the pharmaceutical industry in a number of ways, says the complaint for this class action: Both rely on patent protections, both have safety requirements, and in both, generics enter the market after patents have expired. But the complaint brings suit against pesticide companies Syngenta Crop Protection AG, Syngenta Corporation, Syngenta Crop Protection, LLC, and Corteva, Inc., alleging that they have created anticompetitive “loyalty programs” to suppress generics.
Syngenta, Corteva Anticompetitive “Loyalty Programs” Complaint