Indian competition authority investigates Monsanto in GM seeds case

Indian competition authority investigates Monsanto in GM seeds case

The Competition Commission of India (CCI) has launched an antitrust investigation into Monsanto’s joint venture with Mahyco, an Indian seed company.  The CCI has concerns that the companies abused their dominant position in the market for genetically modified cotton technology.

Monsanto has worldwide patents and trademarks and associated licensing arrangements for genetically modified products.  Its ‘Bt’ technology combats the Bollworm pest in cotton cultivation.  Monsanto and Mahyco both license the technology to seed manufacturers which onsell modified seeds to distributors.

Monsanto introduced the technology to India in 2002.  The complainants allege that the joint venture parties priced the Bt technology excessively and imposed unfair conditions in their licence agreements. It is further alleged that they leveraged a dominant position in the upstream technology market into the downstream seed market where Bt technology was present in virtually all the seeds used for cotton cultivation.

The investigation is at a relatively early stage.  Published statements disclose limited details of the CCI’s theory of harm or the evidence it is relying on.   

Although the CCI already has some seven years of enforcement experience under the Competition Act 2002, a number of its decisions have been controversial and subject to challenges before the Competition Appellate Tribunal (Compat).  At the end of last year, Compat quashed the biggest fine that the CCI has levied to date in its cement cartel case.

The CCI should be anxious to ensure that the rights of the defence are respected. The investigation comes only a week after Compat has agreed to hear appeals by air cargo defendants SpiceJet and IndoGo accepting their pleas that they were denied due process.