"Not only would a Bayer-Monsanto merger likely violate the Clayton Act, but it would violate the specific terms of a court order."
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Anti-trust legal experts find significant concerns with the Bayer's acquisition of Monsanto
An objective legal opinion by anti-trust experts agrees the merger would violate anti-trust laws and lessen competition. The proposed merger would violate a court order that was part of a U.S. Department of Justice consent decree and the primary U.S. anti-trust merger statute, the Clayton Act. The merger would eliminate direct competition between two of the largest players in the farm supply and seed sector – directly affecting seed development, herbicide markets, and innovative research and development. There would likely be less choice and higher food prices for consumers.
Monsanto would grow its significant market power. Its dominance of genetic seed traits and their complimentary herbicides would create unacceptable market concentration, particularly of seed development and sales in North America of cottonseed, canola, soybeans, and corn. Independent research into seed traits and herbicides would face increased restriction.
Monsanto’s RoundUp faces viable competition from only one company: Bayer. Neither company will have an incentive to further develop Bayer's Liberty Link alternative, nor to develop alternatives to RoundUp if a merger goes ahead.
A merger will also mean the Bayer-Monsanto company will control nearly 70% of the cotton acerage in the United State – unacceptably high by antitrust standards. Monsanto already possesses a 97 percent share for soybean traits, a 75 percent share for corn traits, and a 95 percent share for cotton traits, a combined Bayer-Monsanto would have a greater (and for cotton a dominant) share of the seed market, where its traits are promoted.
"Bayer-Monsanto post-merger would account for approximately 70 percent of the U.S. acreage for cotton."
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Monsanto’s already tight restrictions on independent, objective research of its seeds can result in a “new normal”. Already, academics must gain express approval before researching any seeds licenced with Monsanto’s traits.
Farmers’ choices of seeds they can access will be severely limited after a deal, as more traits, seeds, and herbicides could be foreclosed and squeezed out of the market due to licensing restrictions. Ultimately, this will reduce consumer choice as upstream market impacts take hold.
Independently authored by: Maurice Stucke, a law professor at the University of Tennessee and formerly a prosecutor with the Antitrust Division of the U.S. Department of Justice, and Allen Grunes, also formerly of the U.S. Department of Justice Antitrust Division