Diamond Price Fixing Conflict of De Beers Opened New Diamond Marketing Horizons
2004: Diamond Price Fixing Conflict of De Beers Is Solved After Confession
With their settlement of their old indictment for price fixing, De Beers is now free to come into the United States.
On July 13, De Beers Centenery AG pled guilty in federal court in Ohio to conspiring to fix the price of industrial diamonds in the United States and elsewhere, and was sentenced to pay a $10 million fine.
The plea resolves a 1994 case involving De Beers and alleged co-conspirator General Electric. De Beers was not tried on the original anti-trust case because it felt the court lacked jurisdiction over the company in America. As a result of the plea agreement filed today, De Beers Centenary has consented to the jurisdiction of the court to resolve this case.
What is worth noting is that this case involves industrial diamonds, not gems. De Beers has never been indicted for fixing gem diamonds, although there are currently several lawsuits charging them with anti-trust violations (see story below.)
A De Beers statement said the lawsuit shows their desire to adhere to “the finest ethical standards” and to be “legally compliant” in every jurisdiction that it operates.
The BBC’s World Business Report and National Public Radio recently called Joseph Schlussel of the Diamond Registry to ask his opinion of the De Beers settlement.. He said that it is a sign of De Beers’ shift in strategy. Now that is no longer the only supplier of rough, it wants a slice of the larger pie — the close to $60 billion worldwide global diamond jewelry market, which is ten times De Beers’ nearly $6 billion in rough sales.
They also asked what effect will it have on the industry. Schlussel said that if they have an actual presence here, it will be like the Wizard of Oz coming to Kansas, as no longer will they just be in London pulling the strings.
Some people worry that their opening a store on 57th Street for consumers will provide competition for some of the better carriage trade jewelers. But he believed it would make De Beers more attentive to the needs of the American cutters, jewelers, dealers and consumers.