Corteva has agreed to a proposed antitrust settlement with the Federal Trade Commission and 12 states that would impose a 10-year overhaul of its pesticide loyalty programs and require a $35 million payment to the state plaintiffs. The settlement, filed in federal court in North Carolina, resolves the claims against Corteva in a lawsuit alleging that its distributor incentive programs restricted access for lower-priced generic pesticide competitors.
Under the proposed stipulated order, Corteva would be prohibited for 10 years from conditioning payments or other benefits to distributors on purchasing more than 50% of their requirements for a given pesticide active ingredient from Corteva. The order would also prohibit programs that restrict distributors from purchasing generic products above specified thresholds and would bar volume-based arrangements designed to replicate prohibited share-based loyalty programs.
The proposed restrictions would apply to all of Corteva’s post-patent active ingredients, rather than only the three example ingredients identified in the original complaint. Corteva would also be prohibited from discriminating against or threatening customers because they decline prohibited loyalty terms or conduct business with competitors, including generic pesticide manufacturers.
The FTC and state attorneys general filed their original lawsuit in September 2022 against Corteva and Syngenta, alleging that the companies used loyalty programs to limit generic competitors’ access to pesticide distribution. The regulators alleged that distributors received payments for purchasing all or nearly all of their annual requirements for certain pesticide active ingredients from the manufacturers, reducing purchases from competing generic suppliers.
The settlement covers only Corteva. Litigation against Syngenta remains ongoing, according to the FTC. The agency said the Corteva agreement is intended to expand access to generic pesticide products and increase competitive options for U.S. farmers after relevant patent and regulatory exclusivity periods expire.
The $35 million payment will go to accounts designated by the 12 state plaintiffs: California, Colorado, Illinois, Indiana, Iowa, Minnesota, Nebraska, Oregon, Tennessee, Texas, Washington and Wisconsin. Under the proposed order, Corteva would make the payment within 30 calendar days after the court enters the order, subject to the states providing the required payment and tax information.
The settlement documents allow state attorneys general to use the payment for purposes including legal expenses, antitrust enforcement, agricultural programs and, where appropriate, distribution to farmers for restitutionary purposes. The proposed order also gives the states and FTC continuing enforcement rights and requires Corteva to maintain compliance reporting and related records.
Corteva does not admit that the allegations in the amended complaint are true under the proposed order. The agreement states that Corteva admits only facts necessary to establish jurisdiction and would comply with the order once it is issued by the court.
The FTC and the states filed the proposed order with the U.S. District Court for the Middle District of North Carolina on Sept. 25. The parties jointly asked the court to enter the order, and the FTC announced the agreement on Sept. 28. The agency’s commission approved the proposed order by a 2-0 vote.
The proposed settlement comes as Corteva prepares to separate its seed and crop-protection businesses. Corteva said in a Sept. 25 announcement that the Securities and Exchange Commission had declared Vylor’s Form 10 registration statement effective, with the separation expected to be completed Oct. 1. The proposed pesticide order is structured to continue applying to the business resulting from the separation that manufactures, markets, sells or distributes pesticides and crop-protection products.
The court’s approval remains an important procedural step. The FTC said stipulated orders have the force of law once they are approved and signed by the district judge, while the settlement document states that Corteva’s compliance obligations begin when the court issues the order.
The agreement therefore represents a negotiated resolution of the federal and state claims against Corteva rather than a judicial finding that the company’s alleged conduct violated the law. If entered by the court, the order would impose long-term restrictions on Corteva’s pesticide distribution practices while requiring the $35 million payment to the participating states.
