FTC, States Reach Antitrust Settlement With Corteva Over Pesticide Sales

Under a proposed settlement announced by the Federal Trade Commission, Corteva will face restrictions for 10 years on programs that reward pesticide distributors based on how much of their supply they purchase from the company. The agreement resolves the government’s case against Corteva while litigation involving Syngenta continues, according to the FTC.

The settlement stems from a lawsuit filed in 2022 by the FTC and state attorneys general. Regulators alleged that Corteva and Syngenta used distributor incentives to limit the ability of generic pesticide manufacturers to compete after patent and regulatory protections on certain products expired.

According to the FTC’s Sept. 28 announcement, the programs offered year-end payments to distributors that obtained all or nearly all of their requirements for pesticides containing certain active ingredients from one of the manufacturers. Regulators alleged that the arrangements left distributors purchasing comparatively little from generic competitors, restricting an important route to market for lower-cost products.

The government contends that those practices helped preserve higher pesticide prices after generic competition otherwise could have emerged. Farmers consequently paid millions of dollars more for crop-protection products, according to allegations in the FTC complaint.

Corteva’s agreement prohibits it from tying payments to a distributor buying more than 50% of its requirements for a pesticide active ingredient from the company. It also bars programs designed to keep distributors’ purchases of generic alternatives below a 50% threshold, as well as volume-based arrangements intended to recreate the prohibited incentives.

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Read more: FTC Opens Broad Antitrust Probe Into Fertilizer Price Surge Affecting US Farmers

The order additionally prevents Corteva from penalizing or threatening customers for rejecting prohibited loyalty conditions or for doing business with competing suppliers, including generic manufacturers. The restrictions cover all of Corteva’s post-patent pesticide active ingredients rather than only the three examples cited in the government’s original case, according to the FTC.

Corteva will also make a payment to the state plaintiffs to resolve their monetary claims. The FTC release displays the amount as “$35,000,0000,” an apparent typographical error; contemporaneous reporting describes the payment as $35 million.

The participating states are California, Colorado, Illinois, Indiana, Iowa, Minnesota, Nebraska, Oregon, Tennessee, Texas, Washington and Wisconsin, according to the agency. The FTC voted 2-0 to approve the proposed stipulated order, which was filed in the U.S. District Court for the Middle District of North Carolina. The agreement will carry the force of law once approved and signed by the federal judge, the FTC said.

David Shaw, principal deputy director of the FTC’s Bureau of Competition, said the agreement was intended to remove practices the agency says restricted sales of lower-priced alternatives and to expand farmers’ pesticide choices.

The settlement marks the latest development in a case that has been underway for four years. A federal judge in 2024 allowed the FTC and states to proceed with their allegations against Corteva and Syngenta, rejecting efforts to dismiss the government lawsuit. The companies had denied the allegations.

Corteva separately agreed earlier this year to pay $85 million to resolve a private class-action lawsuit brought by farmers over similar allegations concerning pesticide loyalty programs, Reuters reported in June. Corteva denied wrongdoing as part of that agreement.

Source: FTC