The Competition Tribunal dismissed a lawsuit by Actigen Nova S.A. against Bioagro S.A. for alleged infractions to article 3 of Decree Law N° 211, consisting in preventing entry of new agents to the market of chitin and chitosan derived products for resistance induction in vegetables, for agricultural use, by non-compete clauses that were included in the purchase agreement of Invention Patent N° 41,980, celebrated between Bioagro S.A. and Mr. Jaime Villanueva Fernández.

The decision stated that, based to the available information, it was not possible to define clearly the relevant product market or to estimate the defendant’s shares in the markets of rooting agents and inducers of acquired systemic resistance (in the case that these are different products than organic biostimulants).

Furthermore, the Tribunal concluded that, while it is true that Bioagro would have a substantial interest in the bioestimulants market, the information available on the conditions of entry do not allow the Tribunal to reach a conviction that the defendant enjoys market power to abuse.

Given this, it was not possible to conclude that the non-compete clauses in the purchase agreement that generated this controversy prevented, hindered or obstructed competition, or allowed the defendant to reach or maintain a dominant position for him to abuse.

The Tribunal stated that, as it has previously indicated (Decision # 111), non-compete clauses do not constitute a violation of free competition by themselves, unless it is proven that said clauses hinder, restrict or prevent competition, or tend to produce those effects in the relevant markets. Notwithstanding the above, if the economic agent in whose favor the non-compete clauses are determined enjoys market power, those clauses could hinder, restrict or prevent competition or tend to produce those effects, if the clauses had no temporal, spatial or scope limitation, or if they are manifestly disproportionate and excessive, in relation to the right that it tries to protect.

As for the non-compete clauses questioned in this case, the Tribunal stated that they were written in very broad terms, with no temporal, spatial or scope limitations. Therefore, they would not satisfy the standards that competition jurisprudence has established in this matter, if the economic agent in whose favor those clauses are established had market power, which was not proven in this case.

Lastly, regarding the complaint referring to alleged actions made by the defendant before BASF executives to prevent the plaintiff from continuing negotiations to introduce Actigen RTF to the market, the Tribunal concluded that it is not possible to state that these actions were against competition.