Federal Register/Vol. 83, No. 114/Wednesday, June 13, 2018

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Federal Register/Vol. 83, No. 114/Wednesday, June 13, 2018 27652 Federal Register / Vol. 83, No. 114 / Wednesday, June 13, 2018 / Notices DEPARTMENT OF JUSTICE COMPLAINT seeds with new genetically modified The United States of America, acting traits, as well as other innovative Antitrust Division under the direction of the Attorney products that improve yields for farmers. This competition is central to United States of America v. Bayer AG General of the United States, brings this civil antitrust action to prevent Bayer their businesses. Monsanto’s chief and Monsanto Company; Proposed technology officer has said that Final Judgment and Competitive AG from acquiring Monsanto Company. The United States alleges as follows: innovation is ‘‘the heart and soul of who Impact Statement we are.’’ Similarly, Bayer’s core strategy I. INTRODUCTION is to become the ‘‘most innovative’’ Notice is hereby given pursuant to the agricultural company in the world. Both Antitrust Procedures and Penalties Act, 1. Bayer’s proposed $66 billion acquisition of its rival, Monsanto, would companies invest significant sums of 15 U.S.C. § 16(b)–(h), that a proposed money into research and development Final Judgment, Stipulation and Order, combine two of the largest agricultural companies in the world. Across the and monitor each other’s efforts, and Competitive Impact Statement have spurring each other to work faster and been filed with the United States globe, Bayer and Monsanto compete to sell seeds and chemicals that farmers invest more to improve their offerings District Court for the District of and develop new products. For Columbia in United States of America v. use to grow their crops. This competition has bolstered an American instance, Monsanto recently developed Bayer AG and Monsanto Company, a seed treatment product that protects Civil Action No. 1:18–cv–1241. On May farming industry that contributes hundreds of billions of dollars a year to crops from destructive worms called 29, 2018, the United States filed a nematodes, directly challenging Bayer’s the economy, provides millions of jobs Complaint alleging that Bayer AG’s historic dominance in that space. The across the country, and ensures a safe proposed acquisition of Monsanto proposed acquisition would eliminate and reliable food supply for consumers Company would violate Section 7 of the this competition to develop new in the United States and around the Clayton Act, 15 U.S.C. § 18. The products that farmers will depend on for world. proposed Final Judgment, filed at the decades into the future. same time as the Complaint, requires 2. If allowed to proceed, the proposed 5. The merger would also Bayer AG to divest a substantial acquisition would transform the substantially lessen competition collection of assets relating to seeds and agricultural industry and harm through the vertical integration of the traits, crop protection, and digital competition across a broad range of two companies. Specifically, by agriculture. products. Most prominently, the combining Monsanto’s strong position acquisition would eliminate in seeds with Bayer’s dominant position Copies of the Complaint, proposed competition to develop and sell Final Judgment, and Competitive Impact in certain seed treatments, the merger genetically modified seeds in cotton, would give the combined company the Statement are available for inspection canola, and soybeans—three of the on the Antitrust Division’s website at incentive and ability to harm its seed largest crops grown in the United rivals by raising the price of those seed http://www.justice.gov/atr and at the States—and the herbicides that are Office of the Clerk of the United States treatments—a key input for genetically paired with these seeds to form the modified seeds. For example, today, District Court for the District of foundation of farmers’ weed-control Columbia. Copies of these materials may Bayer sells the only seed treatment that strategies. effectively controls a destructive pest be obtained from the Antitrust Division 3. These agricultural technologies upon request and payment of the called corn rootworm. Because Bayer emerged in the 1990s when Monsanto does not sell corn seeds itself, it has a copying fee set by Department of Justice introduced ‘‘Roundup Ready’’ soybeans, regulations. strong incentive to sell that seed which were genetically engineered to treatment to all corn seed companies, Public comment is invited within 60 resist Monsanto’s herbicide, Roundup. including Monsanto’s rivals. But the days of the date of this notice. Such Monsanto’s invention allowed farmers merger would change the calculus for comments, including the name of the who planted Roundup Ready soybeans Bayer because it would now own submitter, and responses thereto, will be to spray Roundup over the top of their Monsanto, the largest supplier of corn posted on the Antitrust Division’s crops, thereby killing the weeds without seeds in the United States. Armed with website, filed with the Court, and, under harming the crops. It was a wildly Monsanto’s strong position in corn certain circumstances, published in the popular invention; by 2005, almost 90% seeds, the merged company would Federal Register. Comments should be of U.S. soybean acres were planted with likely charge its seed rivals more for the mailed to Kathleen S. O’Neill, Chief, Roundup Ready seeds. In response, in seed treatment, knowing that they rely Transportation, Energy & Agriculture 2009, Bayer launched its own on the product and would be less able Section, Antitrust Division, Department ‘‘LibertyLink’’ genetically modified to compete effectively without it. of Justice, 450 5th Street NW, Suite soybeans, which were engineered to 6. Finally, the merger would eliminate 8000, Washington, DC 20530. withstand Bayer’s Liberty herbicide. head-to-head competition between Both companies have introduced similar Patricia A. Brink, Bayer and Monsanto to develop and sell innovations in cotton and canola, seeds for five types of vegetables: Director of Civil Enforcement. generating competition that has resulted tomatoes, carrots, cucumbers, onions, UNITED STATES DISTRICT COURT in higher crop yields, lower prices, and and watermelons. Although vegetable FOR THE DISTRICT OF COLUMBIA greater choice for American farmers. seeds are not genetically modified like Today, Bayer’s weed-control systems are cotton, canola, and soybeans, Bayer and United States of America, 450 5th Street NW, Suite 8000, Washington, DC 20530, the only competitive alternatives to Monsanto compete aggressively with Plaintiff, v. Bayer AG, Kaiser-Wilhelm-Allee Monsanto’s Roundup Ready systems in one another to breed higher-quality and 1, Leverkusen, Germany 51368, and cotton, canola, and soybeans. higher-yielding varieties. Monsanto Company, 800 North Lindbergh 4. Bayer and Monsanto also compete 7. By eliminating competition Boulevard, St. Louis, MO 63167, Defendants. head-to-head to develop the next between Bayer and Monsanto and Civil Action No.: 1:18–cv–1241 generation of transformative products, combining their businesses, the Judge James E. Boasberg including cotton, canola, and soybean proposed acquisition would result in VerDate Sep<11>2014 18:05 Jun 12, 2018 Jkt 244001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4703 E:\FR\FM\13JNN2.SGM 13JNN2 amozie on DSK3GDR082PROD with NOTICES2 Federal Register / Vol. 83, No. 114 / Wednesday, June 13, 2018 / Notices 27653 higher prices, less innovation, fewer IV. RELEVANT MARKETS soybeans, the market structure differs choices, and lower-quality products for 14. As noted, Bayer and Monsanto across regions; thus, the relevant farmers and consumers throughout the compete across a broad range of geographic market is the southern United States and around the world. To agricultural products, including United States, where Bayer has focused prevent those harms, this unlawful genetically modified (GM) seeds and its soybean breeding program and been acquisition should be enjoined. traits for row crops; crop protection particularly successful. 17. For the relevant crop protection products, such as herbicides and seed II. DEFENDANTS AND THE products (foundational herbicides and treatments; and vegetable seeds. The TRANSACTION nematicidal seed treatments), the proposed acquisition would 8. Bayer is a life-sciences company geographic markets are national. Bayer substantially lessen competition in the based in Leverkusen, Germany. The and Monsanto sell these products company employs nearly 100,000 following 17 products: throughout the United States. In people worldwide and has operations in Bayer–Monsanto: Relevant Products addition, these products require U.S. almost 80 countries. Bayer has three GM Seeds and Traits regulatory approval, which is expensive main business lines: pharmaceuticals, Cotton: and time-consuming, so competition is which focuses on prescription • Herbicide-tolerant traits limited to products that have obtained medicines; consumer health, which • Insect-resistant traits the necessary approvals. Similar focuses on over-the-counter products; • GM cotton seeds products sold in other countries but not and its agricultural business, Bayer Crop Canola: approved for use in the United States Science. Over the past decade, Bayer • Herbicide-tolerant traits are not reasonable substitutes for Crop Science has become one of the • GM canola seeds American farmers. largest global agricultural companies. Soybeans: 18. For these reasons, in each of the Today, its crop protection business is • Herbicide-tolerant traits relevant geographic markets for seeds the second largest in the
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