AGCM

PRESS RELEASE

PLANT PROTECTION PRODUCTS: ANTITRUST SANCTIONS BAYER CROPSCIENCE SRL WITH 5.124 MILLION EURO FINE FOR ABUSE OF DOMINANT POSITION

The company applied a strategy of competitor exclusion by blocking access to studies required for renewing market authorizations to sell fosetyl-based fungicides.

The Antitrust Authority is fining Bayer Cropscience SRL for over 5.124 million euros for abusing its dominant position (together with Bayer Cropscience AG, parent company of the Bayer Crop Protection division) in the market for the production and commercialization of fosetyl-based fungicides, which protect grapevines from peronospora.

According to the Antitrust investigation, Bayer undermined talks with competitors by denying access to certain studies in its possession that are needed to acquire market authorization for fosetyl-based products. The studies are essential for obtaining market authorization renewals, but current laws prohibit their replication because of the involvement of animal testing on vertebrates. The result was that the competitor companies, who united in the form of a Task Force for the negotiations, were forced out of the market because of their inability to renew the authorizations.

The dominant position of Bayer in the Italian fosetyl-based fungicide market was demonstrated in several ways: the company's high share of the market (in 2007, approximately 46% in direct sales alone); the fact that in the Italian market, Bayer was the only producer to both produce/sell finished products and supply its own competitors with pure fosetyl as an active ingredient and fosetyl-based formulas; the high degree of pricing policy independence evidenced by Bayer in the 2007-2010 period. More specifically, the average price of Bayer products showed significant growth in this period as compared to other companies in the market, yet the company still nearly doubled its sales relative to competitors.

The evidence gathered during the course of the proceedings shows that Bayer was well aware of the anti-competitive nature of its own tactics, which represent an abuse that can cause significant harm to consumers by excluding its primary competitors from the market. The tactics caused an overall reduction in the supply side of the market and led to substantial increases in final sales prices for consumers.

Rome – 05^th July 2011