Innovation, Patents, and Competition in Modern Agriculture: A Case Study of Bayer and Monsanto Merger

Abstract

The use of digital technologies to aid the agronomic decision making of farmers characterizes modern agriculture. Digital farming is expected to enhance the market power of leading innovative firms in the seed industry, which is already having a high level of concentration. The merger of two leading innovative firms—Bayer and Monsanto—is to be seen in this context. This article examines the emerging anticompetitive considerations from the deal and the contribution of the Competition Commission of India in alleviating such considerations while approving the deal. It is found that threats were emerging in three areas—traits and seeds, nonselective herbicides, and digital farming platforms. To eliminate the anticompetitive effects of the deal, both the companies were required to divest their research and development intensive trait, seed, and nonselective herbicide businesses. They were also required to license the proprietary active ingredients of nonselective herbicides, if the use of their seeds was linked to the application of such herbicides, on fair, reasonable, and nondiscriminatory (FRAND) terms. They were also required to license the agronomic data, collected from India, and used in their digital platforms, to potential users on FRAND terms.