July 6, 2004
W.B. David Sues De Beers and Others
W. B. David & Co. Inc., New York City, filed suit July 1 in U.S. District Court for the Southern District of New York against 90 defendants, including De Beers entities and principals, as well as many De Beers clients. W.B. David is asking for not less than $100 million in various damages. It is also asking the courts to attach or seize De Beers' U.S. assets, including trademarks and intellectual property, such as the slogan "A Diamond is Forever," along with a long list of other assets potentially held by De Beers defendants.
"The De Beers cartel and its confederates and coconspirators have inflicted serious injury on us. We are prepared to pursue this matter vigorously to a successful conclusion," says W.B. David in a prepared statement. W.B. David was one of the companies De Beers supplied with rough diamonds until last year, when it was eliminated from the group's client, or sightholder, list.
The 140-page suit includes these complaints, among others:
- De Beers continues to be a monopolist, in violation of U.S. antitrust laws, despite its reduced share of the total rough diamond market. The suit cites evidence to support its claim.
- De Beers eliminated W.B. David from its list of Supplier of Choice clients not because it was a poor applicant, but because it wants to "increase its downstream, vertical monopoly power by gaining further control over retail sales of diamonds." W.B. David says "De Beers has targeted U.S. diamantaires [for elimination from its client list] who manufacture and distribute two carat and larger rough diamonds, which are in the greatest shortage, which are key to De Beers' aspirations to sell diamonds."
- The lawsuit also charges that De Beers stole W.B. David's proprietary Leading Jewelers of the World program and is using it with a group of retail jewelers in Japan, where W.B. David says it had planned to introduce the program. Leading Jewelers of the World, introduced by W.B. David in 2001, is a membership group of elite retail jewelers who agree to adhere to high standards in diamonds, service and other areas. The suit alleges that De Beers' termination of W.B. David's sight has precluded the company from continuing to meaningfully utilize the program, since it no longer has the kinds of diamonds needed to supply its members.
- The lawsuit claims De Beers is futher controlling the distribution of rough diamonds and illegally strengthening its dominant market position by giving only certain nonsightholding diamantaires a rough supply through its subsidiary Diamdel.
- The lawsuit says De Beers is tightening its control of the markets and taking the actions specified in the suit to "optimize the chances of success, and profits to be made, in its current and future De Beers retail stores worldwide and in the U.S."
When contacted, a De Beers press office representative told Professional Jeweler De Beers had not been served with the suit, making it inappropriate to comment
by Peggy Jo Donahue