FTC, States Win Protections to Lower Pesticide Prices for American Farmers in Antitrust Case Against Corteva

The Federal Trade Commission and a coalition of state attorneys general have secured a significant settlement agreement with pesticide manufacturing giant Corteva Inc. that will lead to lower pesticide prices for American farmers.

Under the terms of the settlement, Corteva will dismantle its existing pesticides loyalty program, which has limited distributors' ability to do business with generic competitors that seek to enter the market after Corteva patents have expired. The settlement agreement will provide relief to farmers who have long endured high pesticide prices by ensuring greater access to lower-cost generic pesticide products.

"This settlement will do away with unfair corporate practices that have hurt farmers by impeding the sales of lower-priced products," said FTC Bureau of Competition Principal Deputy Director David Shaw. "The agreement the FTC and its state partners secured will give farmers better pesticide options at lower prices, enabling farmers to continue to put food on Americans' tables."

For a period of 10 years, the stipulated order will prohibit Corteva from conditioning payments or other benefits to a distributor on that firm purchasing a high share of a given pesticide active ingredient from Corteva or similarly limiting its purchases of generic equivalents.

The settlement reached with Corteva resolves a lawsuit brought by the FTC and states in 2022, which alleges that Corteva implemented a post-patent loyalty program that paid distributors to block competitors from selling cheaper generic products to farmers. According to the complaint, this conduct allowed Corteva to maintain elevated prices, forcing American farmers to spend millions of dollars more for essential crop protection products. The complaint makes similar allegations as to Syngenta-another pesticide manufacturing giant-and its post-patent loyalty program.

The settlement with Corteva builds on recent FTC actions, including a landmark settlement with agricultural equipment maker Deere & Company, to lower the cost of living for all Americans, including farmers and consumers.

The settlement announced today resolves only the claims against Corteva. Litigation against Syngenta remains ongoing.

The Lawsuit

The FTC and states' complaint against Corteva and Syngenta alleges that each defendant's loyalty program provides end-of-year payments to distributors that purchase from that defendant all (or nearly all) of their annual requirements of pesticides containing certain active ingredients, which meant they purchased very little of competing generic pesticides.

Ordinarily, lower-priced generic competitors should be able to enter the market and drive down prices once the relevant patent and regulatory exclusivity periods have expired. The complaint alleges that the challenged loyalty programs illegally extend Syngenta's and Corteva's monopolies by excluding lower-priced generic competitors from an essential distribution channel. As a result, according to the complaint, U.S. farmers were forced to overpay for crop protection products.

Corteva Settlement

The FTC and states' agreed settlement with Corteva will end Corteva's alleged exclusionary conduct that has raised pesticide prices for farmers.

The stipulated order prohibits Corteva, for 10 years, from:

• Implementing loyalty programs that condition payments to a Corteva distributor customer on the customer purchasing a greater-than-50% share of its requirements of a given pesticide active ingredient from Corteva
• Implementing share-based programs that limit the share of a generic product that a distributor customer may purchase to under 50% (or the volume equivalent)
• Implementing a volume-based loyalty program for the purpose of replicating or reintroducing a prohibited share-based loyalty program
• Implementing other, specified conditions that enhanced the exclusionary effect of Corteva's prohibited loyalty program on generic competitors
• Discriminating against or threatening customers because they refuse to agree to prohibited exclusive or loyalty terms, or because they conduct business with Corteva's competitors, including generic manufacturers

The stipulated order applies to all Corteva's post-patent active ingredients, extending beyond the three exemplar active ingredients named in the FTC and states' complaint.

In addition, the stipulated order requires Corteva to pay the state plaintiffs $35,000,0000 to resolve their monetary claims. The FTC's co-plaintiffs include California, Colorado, Illinois, Indiana, Iowa, Minnesota, Nebraska, Oregon, Tennessee, Texas, Washington and Wisconsin.

The Commission vote to approve the proposed stipulated order was 2-0. The order was filed in the U.S. District Court for the Middle District of North Carolina.

NOTE: Stipulated orders have the force of law when approved and signed by the District Court judge.