February 3, 2000
De Beers Asks U.S. To Relax Antitrust Barriers
The Financial Times of London reports De Beers has asked U.S. officials to consider settling a years-old price-fixing indictment and allow diamond monopoly to conduct business in the U.S. despite antitrust laws.
The U.S. jewelry trade has watched closely over the past year as De Beers conducts branding initiatives many believe may lead to direct sales of branded diamonds in the U.S. A relaxation of antitrust laws would remove a key barrier to doing so. Because De Beers holds monopoly power over diamond prices, U.S. laws prohibit the company from conducting business here.
De Beers and U.S. officials met recently in London to discuss the issue of diamond sales in Angola and other war-torn African countries. The U.S. is beginning to take a more active role in United Nations initiatives to keep peace in war-torn central Africa.
The Financial Times reported U.S. antitrust officials were considering settling the price fixing indictment if De Beers accepts restrictions on its international monopoly of diamonds. The indictment occurred in 1994 during an investigation of price fixing involving industrial diamonds. A U.S. judge dismissed the case and dropped the charges against General Electric, a codefendent, but the indictment against De Beers remains because the company refused to appear in U.S. courts.
De Beers is not making its negotiations with the U.S. a condition for cooperating with international efforts to stop black-market diamond sales in Africa. However, the company also used the interest in African welfare to point out the benign effects of De Beers' diamond monopoly the financial security of diamond-rich countries such as Namibia and Botswana. Whether this fact will cause the U.S. to reassess its policy remains to be seen.
- by Peggy Jo Donahue