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UPDATE: Monsanto a focus of U.S. antitrust investigation

Thursday, October 8, 2009 | 5:42 p.m. CDT; updated 8:46 a.m. CDT, Friday, October 9, 2009

ST. LOUIS — The U.S. Justice Department is investigating whether Monsanto Co. violated antitrust rules in trying to expand its dominance of the market for genetically engineered crops, the company said Thursday.

Monsanto has provided interviews and documents to the Justice Department over the past two months, company spokesman Lee Quarles said. He said the department has questioned Monsanto about its marketing tactics in the biotech seed industry, which have become a target of criticism.

Quarles said Monsanto has done nothing illegal and is cooperating with the investigation.

"We definitely stand behind our business," he said.

The department's investigation of Monsanto is part of a previously announced inquiry into consolidation in the seed industry. The department is looking into Monsanto's licensing agreements with seed companies.

St. Louis-based Monsanto is the world's biggest seed company, and its patented genes are inserted into a majority of U.S. corn and soybean crops. Critics say Monsanto has used its market clout to squeeze competitors.

A Justice Department spokeswoman declined to confirm or deny the investigation.

The department has interviewed two of Monsanto's biggest rivals, Delaware-based DuPont and Swiss biotech firm Syngenta AG, about Monsanto's business practices.

At least two states, Iowa and Texas, are conducting their own antitrust investigations of Monsanto. Iowa Attorney General Tom Miller is investigating Monsanto's marketing practices, said Eric Tabor, Miller's chief of staff. Tabor declined to comment further.

Texas also is conducting an inquiry, according to two people with direct knowledge of the investigation.

Quarles said Monsanto is cooperating with both states.

At issue is how Monsanto sells and licenses its patented genes. The company has licensing agreements with seed companies that let them insert Monsanto genes into about 96 percent of U.S. soybean crops and 80 percent of all corn crops.

Monsanto's rivals allege that the company uses its licensing agreements as a way to squeeze competitors and control smaller seed companies, which Monsanto denies.

Syngenta and DuPont have sued Monsanto over the licensing agreements, alleging they violate U.S. antitrust law. Syngenta filed its lawsuit in 2004 and settled the case last year. DuPont filed suit last summer; the case is pending in federal court in St. Louis.

DuPont spokesman Dan Turner and Syngenta spokesman Paul Minehart declined to comment beyond saying the companies are cooperating with the Justice Department investigation.

 


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