Innovation, Patents, and Competition in Modern Agriculture: A Case Study of Bayer and Monsanto Merger

• Date: 01 June 2021
• Author: Reji K. Joseph
• Published date: 01 June 2021
• DOI: 10.1177/0003603X21997022

Article

Innovation, Patents,

and Competition in Modern

Agriculture: A Case Study

of Bayer and Monsanto Merger

Reji K. Joseph*

Abstract

The use of digital technologies to aid the agronomic decision making of farmers characterizes modern

agriculture. Digital farming is expected to enhance the market power of leading innovative firms in the

seed industry, which is already having a high level of concentration. The merger of two leading

innovative firms—Bayer and Monsanto—is to be seen in this context. This article examines the

emerging anticompetitive considerations from the deal and the contribution of the Competition

Commission of India in alleviating such considerations while approving the deal. It is found that threats

were emerging in three areas—traits and seeds, nonselective herbicides, and digital farming platforms.

To eliminate the anticompetitive effects of the deal, both the companies were required to divest their

research and development intensive trait, seed, and nonselective herbicide businesses. They were also

required to license the proprietary active ingredients of nonselective herbicides, if the use of their

seeds was linked to the application of such herbicides, on fair, reasonable, and nondiscriminatory

(FRAND) terms. They were also required to license the agronomic data, collected from India, and

used in their digital platforms, to potential users on FRAND terms.

Keywords

intellectual property rights, competition, market structure, agricultural technologies, agrochemicals,

crop-protection products

I. Introduction

The announcement of the decision by Bayer and Monsanto in 2016 to merge into a single entity led to

heated discussions on the implications for competition and farmers’ choices. Such concerns emerged

from the fact that they were two of the five leading firms globally in research and development

(R&D) in the agriculture sector. They had also ventured into digital technology applications which

were expected to further enhance their market power. This article analyzes the role played by the

* Institute for Studies inIndustrial Development, Vasant Kunj, New Delhi, India

Corresponding Author:

Reji K. Joseph, Institute for Studies in Industrial Development, Vasant Kunj, New Delhi 110070, India.

Email: rejikjoseph@isid.edu.in

The Antitrust Bulletin

2021, Vol. 66(2) 214–224

ªThe Author(s) 2021

Article reuse guidelines:

sagepub.com/journals-permissions

DOI: 10.1177/0003603X21997022

journals.sagepub.com/home/abx