De Beers Antitrust Litigation Key Facts and Outcomes

The De Beers antitrust litigation was a long-standing case that began in 2004, resulting from a class-action lawsuit filed on behalf of American diamond consumers.

In 2004, a class-action lawsuit was filed against De Beers, alleging that the company had engaged in monopolistic practices and price-fixing.

The lawsuit claimed that De Beers had artificially inflated diamond prices through its control of the diamond market, including its exclusive distribution agreements and marketing practices.

De Beers ultimately agreed to settle the lawsuit, paying $295 million to the class of plaintiffs.

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A Canadian court has greenlit a class action lawsuit against De Beers for alleged price-fixing in the diamond market. De Beers is accused of creating a global cartel that controlled nearly 90% of the rough and polished diamond market.

De Beers' alleged cartel involved aggressive management of supply and prices, as well as collusive agreements with competitors, suppliers, and distributors. This is a classic antitrust violation.

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The court's decision was based on the fact that De Beers was the largest producer of rough diamonds in the world and had a monopoly on the rough diamond market for over a century. This gave the company significant control over the diamond pipeline.

De Beers' dominance in the diamond market was so significant that the court deemed it sufficient to establish jurisdiction over the case. The court noted that De Beers knew or ought to have known that its diamonds would be sold in Canada, where the class action lawsuit was filed.

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A Canadian court has greenlit a worldwide diamond price-fixing case against De Beers. The court ruled that the alleged diamond cartel had a significant impact on Canadian consumers, allowing a class action lawsuit to move forward.

De Beers had argued that the court lacked jurisdiction over the claims, but the court disagreed. Madam Justice B.J. Brown noted that De Beers was the largest producer of rough diamonds in the world and had a monopoly power in the rough diamond market for over a century.

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The court found that De Beers' control over the diamond pipeline was so strong that it essentially owned the pipeline. This allowed the court to assert jurisdiction over the case, despite De Beers' arguments to the contrary.

De Beers' expert described the connection between their sales of rough diamonds and the plaintiff's purchase of gem grade diamonds as "remote in the extreme." However, the court disagreed, stating that the defendants knew or ought to have known that their diamonds would be sold in British Columbia.

The court deemed the allegations of a diamond cartel that aimed to create an overcharge sufficient to give the court jurisdiction at this stage in the litigation. This means that the class action lawsuit can proceed against De Beers and the other defendants.

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A class action lawsuit against De Beers was filed in 2004, alleging a worldwide diamond cartel that fixed prices and allocated the market for gem-grade diamonds. The case, Sullivan, et al. v. DB Investments, Inc., et al., is pending in the District of New Jersey.

The lawsuit claims that De Beers and its affiliates conspired to fix prices and create a monopoly in the diamond market, violating federal and state antitrust laws. De Beers pleaded guilty to charges in a 10-year-old price-fixing case in 2004.

De Beers agreed to pay a $10 million fine and was allowed to resume selling diamonds directly in the US market. However, the company still faces a $295 million antitrust settlement from a separate case.

In 2011, the Third Circuit Court of Appeals affirmed the final approval order of the settlement, allowing diamond resellers to receive the proceeds of the settlement. The US Supreme Court refused to consider the case in 2012.

De Beers' settlement with diamond resellers includes a comprehensive injunction limiting the company's ability to restrict the worldwide supply of diamonds in the future. This injunction will benefit US diamond purchasers at the wholesale and retail level.

The case against De Beers began in 2004 and has been ongoing for nearly two decades. The company has faced multiple lawsuits and settlements over its alleged price-fixing practices.

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The settlement in the De Beers antitrust litigation was a significant milestone, providing $295 million to purchasers of diamonds and diamond jewelry, including $130 million to consumers.

De Beers consented to a historic injunction that prohibits the company from monopolizing the world supply of rough diamonds and fixing the price of polished diamonds.

The settlement was approved by the Court on May 27, 2008, after a fairness hearing on April 14, 2008.

De Beers also agreed to submit to the continuing jurisdiction of the United States District Court for enforcement of the injunction.

In addition to the cash payment, De Beers agreed to pay a $10 million fine after pleading guilty to conspiring to fix prices in the industrial diamond market.

The settlement was the result of years of litigation, with plaintiffs' counsel Eric B. Fastiff stating that De Beers' offer to settle "showed that our strategy was correct."

Distribution of the settlement funds began in 2012, with Initial Distribution checks being mailed to Authorized Reseller Claimants on August 31, 2012.

The remaining proceeds of the Reseller Subclass Net Settlement Fund were distributed to Authorized Reseller Claimants on March 15, 2013, with distribution of settlement funds being completed by November 24, 2015.

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