The Brazilian antitrust authority has launched an investigation into Bayer AG for alleged anticompetitive practices in the seed and biotechnology markets.

The General Superintendence of the Administrative Council for Economic Defense (CADE) said it opened the case March 12 following complaints it received while studying Bayer's acquisition of Monsanto, a transaction that CADE approved with restrictions in February 2018.

Brazil is the world's biggest soybean producer, accounting for about a third of global production.

In a statement, Bayer said it "remains confident that this administrative proceeding will result in confirming that there is no competitive infraction in Bayer's commercial practices."

The company declined to disclose whether it has retained outside counsel to assist in the case. Gabriel Nogueira Dias from boutique Brazilian firm Magalhães Dias Advocacia advised Bayer in its multibillion merger with Monsanto and said he is Bayer's external antitrust lawyer. He would not comment on the investigation.

Yuri Sahione, an administrative lawyer in São Paulo at Cescon, Barrieu, Flesch & Barreto Advogados, said CADE investigations should be able to continue despite quarantines and shutdowns in Brazil prompted by the spread of COVID-19 throughout the world.

CADE plans to focus its Bayer analysis on three practices: discounts on royalties that the company offers for the development of new varieties of soybean seeds; commercial incentives that encourage so-called "breeders" to develop seeds using Bayer's patented Intacta RR2 PRO technology; and contractual provisions that require soybean seed multipliers to cover 15% of their production with seeds provided by Monsanto unit Monsoy.

Multipliers are companies that reproduce seed varieties developed by breeders, processing the seeds in bulk for sale in large, certified quantities in bags or containers.

CADE said it worries that the incentives offered by Bayer could skew production so far in the company's favor that it would squeeze competing breeders of soybeans out of the market. That could result in decreased availability of alternative seeds for farmers and reduced development of "regular crops," the agency warned.

The antitrust authority has the option to issue sanctions at the end of its investigation.