Monsanto: the Parable of the Sower, The Economist - Nov 19,2009

Monsanto is an agriculture research and development conglomerate, famous for Agent Orange and recently featured in the expose Food, Inc. The firm has been very active in acquisition of other firms producing genetically modified agricultural products, especially those it did not initially produce. It had to appeal to antitrust agencies in 1998 and 2007 for major purchases but has recently come under scrutiny by a watch dog group. The group claims the following: The vertical and horizontal integration Monsanto has secured by acquisition is harming the competitiveness of the genetically modified agriculture industry - their words, “impaired state of competition in transgenic seed.” It also claims that the degree to which Monsanto pursues copyright protection in court is grounds for investigation.

Predatory conduct is when the firm takes action that is profitable only if they drive existing firms out of the market or deter potential rivals from entering. At the very least it does not seem that Monsanto is engaging in predatory conduct because, as the article points out, it has been licensing it's products to hundreds of firms including some of it's biggest rivals. This would seem to be an act to keep the firms in the market. In the long run however it may be difficult for a firm to to license the Monsanto and pay for their own development, in that instance it seems the inability of the firm to secure financing rather than an deliberate attempt on the part of Monsanto give the firm the boot. The watchdog group's second argument was that the degree to which Monsanto pursues copyright protection gives some indication that it is violating antitrust. That kind of behavior is not a part of the definition of predation. It does not make the market more competitive for farmers to violate the terms of copyright, and in what way would that help keep other firms in or potential firms coming if farmers stole seed technology.

Interestingly, Mosanto's largest competitor Dupont is also under scrutiny by the Department of Justice for antitrust.