California's attorney general and federal regulators have won a settlement with pesticide maker Corteva that will limit the company's use of loyalty rebate programs and restore competition from generic pesticides. Corteva will pay $35 million to plaintiff states under the agreement.
The lawsuit challenged Corteva's practice of requiring agricultural distributors to purchase 90 percent or more of their supply of certain crop-protection chemicals in exchange for significant rebates. According to the Federal Trade Commission and California Attorney General Rob Bonta, these requirements restricted competition from lower-cost generic alternatives and contributed to inflated prices after patent protections expired.
Under the settlement, Corteva's purchase thresholds will be capped at 50 percent for covered active ingredients, opening the market to generic competitors. The restrictions will remain in place for 10 years, with reporting requirements to monitor compliance. The case was brought by the FTC and attorneys general from California, Colorado, Illinois, Indiana, Iowa, Minnesota, Nebraska, Oregon, Tennessee, Texas, Washington, and Wisconsin.
"California farmers and small businesses deserve a competitive marketplace where they have access to affordable products and are not forced to pay higher prices because competitors have been shut out," Bonta said. Separately, the state's claims against Syngenta, another agricultural chemical company, remain pending, and a private class action seeking damages for California farmers continues.