The U.S. Justice Department’s inquiry into Monsanto Co.’s marketing tactics in the biotech seed industry may be a leading indicator of the Obama administration’s approach to antitrust matters in general.

Monsanto said earlier this month that it has provided interviews and documents in response to an inquiry from the Justice Department in connection with anticompetitive allegations raised by DuPont. The two are fierce competitors in the lucrative seed industry.

“The Justice Department has clearly begun a major investigation and is moving ahead, which is more than happened in the last eight years,” said Peter Carstensen, a former Justice Department lawyer who teaches antitrust law at the University of Wisconsin Law School and studies mergers in the agriculture industry.

However, Carstensen said, that doesn’t mean the government will bring an antitrust case against Monsanto. “We are more than nine months into the Obama administration, and I am still waiting for a shoe to drop, as opposed to talking about dropping a shoe. Is the administration really going to walk the walk?”

Another former Justice Department lawyer, Tim Greaney, who teaches antitrust law at Saint Louis University School of Law, said, “My guess is that they are looking at a number of situations that involve dominant firms with near monopoly power and are interested in reviving and enforcing the Sherman Act, Section 2, which governs monopolization. Very few Section 2 cases were brought under the Bush administration.”

The inquiry comes at an inconvenient time for Monsanto, which considers the next year critical as it tries to offset lower earnings from its Roundup weed killer with higher earnings from its core traits and seeds business.

Hugh Grant, Monsanto chairman, president, and chief executive, said in a fourth-quarter conference call with analysts October 7 that a strong 2010, Monsanto’s current fiscal year, would put the company “in a great position for 2011 and 2012.” Roundup had long been a cash cow for Monsanto, helping to fund seeds and traits research, but more recently its sales have suffered because of price cuts from Chinese competitors.

Sales of Roundup and other glyphosate-based herbicides were $3.5 billion in fiscal 2009, which ended August 31, down from $4.1 billion a year earlier. Meanwhile, sales of seeds and traits totaled $7.3 billion, up from $6.4 billion.

Monsanto reported a profit of $2.1 billion for the year, up slightly from $2 billion the previous year.

Carstensen said a government inquiry is inevitably a distraction. “It’s going to take a bigger piece of management’s time,” he said. “A full-blown trial would really eat up management’s time.”

In addition, competition is intensifying. JPMorgan analyst Jeffrey Zekauskas pointed out in an October 8 note to investors that Monsanto reported no U.S. market share gain in corn or soybean seeds in the most recent year, while DuPont’s subsidiary, Pioneer Hi-Bred International, Inc., recorded gains of 2 percent and 3 percent, respectively.

The background of the antitrust inquiry is this:

Monsanto sued DuPont last spring to prevent what it called “unlawful use” of Monsanto’s herbicide-tolerant technologies in corn and soybeans. Monsanto contended Pioneer was misusing Monsanto’s Roundup Ready** trait “to mask problems” with Pioneer technology.

In response, DuPont countersued, arguing that combining its technologies with Monsanto’s was “clearly within its rights” under a licensing agreement with Monsanto, which broadly licenses its technologies to competitors. In addition, Monsanto was blocking innovation with restrictive licensing agreements, DuPont said.