CCI orders fresh probe against Monsanto

In mounting woes for Monsanto, the Competition Commission of India (CCI) has ordered another detailed probe against the genetically-modified seed major for alleged unfair business practices.

This is the third time this year that CCI is ordering a probe against the company and the latest one is based on a complaint filed by Hyderabad-based Amar Biotech pertaining to Sub-Licensing Agreement (SLA).

The latest complaint was filed against Mahyco Monsanto Biotech (India), Monsanto Holdings Pvt, Monsanto Company and Maharashtra Hybrid Seeds Company.

Ordering the probe, CCI said that in the present case, “the SLA was not extended/renewed by Opposite Party 1 (Mahyco Monsanto Biotech) after efflux of time”. In June, the regulator had ordered a detailed probe into three complaints against Monsanto by clubbing them with an ongoing investigation.

Earlier in February, a probe was ordered on the basis of two complaints.

The commission, in its recent order made public on Tuesday, has directed the DG to probe the present matter and submit a consolidated report in respect of all the clubbed matters.CCI orders detailed investigation into a complaint only if it finds prima-facie evidence of competition norms violations. The regulator's arm -- Director General (DG) -- carries out the probe.

Finding that there is "substantial similarity of the core allegations in the instant information and the earlier cases against the group OP," the regulator has decided to club the current case with ongoing probe.

According to CCI's order, dated September 21, in the previous cases, the SLA was renewed and subsequently, either terminated or posed a threat for termination.

The reason for termination or threat for termination in the previous cases was non-payment of trait value as stipulated in the SLA, which is also the major cause for non- renewal of the SLA in the present matter, it noted.

"The other common allegations include charging of unfair trait value, limiting of scientific development relating to Bt cotton technology as well as Bt cotton seeds, denial of market access and leveraging of the dominant position by the OP group in Bt cotton technology market for expanding their presence in the Bt cotton seeds market," the regulator said.

While the probe order is based on majority view of Chairman and five other members, one member had given a dissent note.

M S Sahoo, who is no longer with the regulator, was of the view that a probe was not warranted since the licencing pacts were entered into prior to commencement of Competition Act.

Amid concerns over unfair pricing ways in the Bt cotton seed market, the government had in March fixed the seed price at Rs 800 per packet (450 grams), which includes Rs 49 royalty fee to technology providers. The move has also been challenged legally by the firm.

Dissatisfied over the developments in the Indian market, Monsanto has made it clear that the company would re-evaluate its business as well as hold back introduction of new technologies in the country.

Recently, global chemicals and pharmaceuticals major Bayer announced acquiring US-based biotech major Monsanto in a deal worth USD 66 billion. EoM