CADE recommends conviction of Bayer for anticompetitive practices in soybean markets

The Office of the Superintendent General of the Administrative Council for Economic Defence (SG/CADE) recommended the conviction of Monsanto Company, Monsanto do Brasil Ltda., Bayer Aktiengesellschaft, and Bayer S.A. for antitrust violations. The case was related to anticompetitive practices on the granting of incentives to plant breeders for the adoption of the Intacta RR2 PRO biotechnology, as well as a loyalty programme and a non-linear discount scheme for soybean seed multipliers.

In January 2018, the SG started the investigation based on complaints received during the merger review concerning Bayer's acquisition of Monsanto. The complaints alleged a range of antitrust violations relating to the breeding and multiplication of soybean seeds and the licensing of soybean biotechnologies in markets in which Bayer, following its acquisition of Monsanto, came to hold a leading position.

During the discovery phase, the SG analysed documents, contracts, statements from market players, previous mergers, information provided by whistleblowers, and expert opinions.

According to the Expert Opinion, the evidence gathered during the proceedings indicates that the investigated parties currently hold a dominant position in the relevant markets, or held it during the period of the conduct under investigation, and that certain practices adopted by the companies produced market foreclosure effects, or were capable of producing them, which hindered the ability of competitors to operate.

Analysis of the SG

Among the practices examined were commercial policies granting incentives to soybean plant breeders to adopt the Intacta RR2 PRO biotechnology (also known as breeding incentives), which were capable of encouraging breeders to prioritise the development of seeds incorporating Monsanto's then-patented biotechnology over biotechnologies in the public domain or conventional seeds, thereby inducing loyalty.

The Monsoy Multiplica Programme was also examined. It offered non-linear discounts to seed multipliers by Monsanto's plant breeding company and was capable of creating incentives for multipliers to remain loyal to Monsoy germplasm and the Intacta RR2 PRO biotechnology. Finally, the investigation analysed a contractual obligation requiring seed multipliers to purchase a minimum percentage of foundation seed from the investigated companies.

According to the SG, the first two practices contributed to reinforcing entry barriers and hindering the expansion of rivals, thereby reducing competitive pressure in markets that are essential to Brazil's soybean agribusiness. As

regards the third practice, the evidence on the record demonstrated that the clause under examination was not enforced by the investigated companies.

Based on the body of evidence produced during the investigation, the SG concluded that it was enough to be considered an antitrust violation and recommended the conviction of the companies, pursuant to Law 12.529/2011.

The SG also recommended that fines be imposed on the companies and that the case be dismissed, in respect of all respondents, insofar as it concerned the alleged obligation to purchase a minimum volume of foundation seed.

The case will be forwarded to the Tribunal of CADE.

Access Case No. 08700.000270/2018-72 and Opinion No. 57/2026/CGAA11/SGA1/SG/CADE