De Beers to pay $295m in price-fixing settlement

Diamond giant De Beers, which is 45% owned by global resources giant Anglo American, is to pay a $295-million class-action settlement after it was accused of fixing diamond prices and monopolising the United States diamond market.

While De Beers, the world’s largest supplier of rough diamonds, has agreed to pay the penalty, it has not acknowledged that it violated the law or did anything wrong.

According to the settlement website, the class-action lawsuits were brought against De Beers by individuals and businesses that purchased loose diamonds and jewellery or other product containing gem diamonds in the US.

“Beginning in 2001, plaintiffs in several states filed lawsuits against De Beers in state and federal courts alleging that De Beers unlawfully monopolised the supply of diamonds, conspired to fix, raise, and control diamond prices, and issued false and misleading advertising,” the website said.

The case involved diamonds purchased from January 1994 until March 2006, and the settlement agreement provides for consumers, resellers and direct purchasers to claim cash back.

Under the proposed settlement, a $295-million fund has been created by De Beers. This fund will be distributed to two groups, or classes, of purchasers: direct purchasers and indirect purchasers, with direct purchasers entitled to claim up to $22,5-million and indirect purchasers given access to the remaining $272,5-million in the fund.

A statement by the US’s Diamonds Claims Administrator said direct purchasers include individuals or businesses, other than De Beers’ Diamond Trading Company sightholders, that purchased any gem diamond directly from De Beers or one of its diamond mining competitors between September 1997 and March 2006.

It said indirect purchasers include consumers who purchased gem diamonds and diamond products for their own use or for a gift, as well as resellers –businesses that purchased gem diamonds and diamond products for resale between January 1994 and March 2006.

“This proposed settlement will provide a cash benefit to consumers who purchased diamonds or diamond jewellery, and broad injunctive relief addressing the conduct alleged in the complaints,” explained Josef Cooper of Cooper & Kirkham in San Francisco, California, co-counsel for the consumer subclass.

De Beers has also agreed to “refrain from engaging in certain conduct that violates federal and state antitrust laws,” the settlement website pointed out.

The deadline for US diamond buyers to file claims is May 19 this year.

“We are very pleased with the proposed settlement,” said Joe Tabacco of San Francisco’s Berman DeValerio Pease Tabacco Burt & Pucillo, co-counsel for the reseller subclass. “After a number of years, we were finally able to achieve a very substantial settlement of these lawsuits.”

The proposed settlement is currently pending in the US District Court for the District of New Jersey. The Diamonds Claims Administrator expects the court to hold an approval hearing on April 14, at which time the proposed settlement and the awarding of legal costs will be considered.

De Beers was unavailable for comment. — I-Net Bridge

PW Botha wagged his finger and banned us in 1988 but we stood firm. We built a reputation for fearless journalism, then, and now. Through these last 35 years, the Mail & Guardian has always been on the right side of history.

These days, we are on the trail of the merry band of corporates and politicians robbing South Africa of its own potential.

To help us ensure another 35 future years of fiercely independent journalism, please subscribe.

Advertisting

South Africa has been junked

Treasury says the credit ratings downgrade “could not have come at a worse time”, as country enters a 21-day Covid-19 lockdown with little money saved up

Mail & Guardian needs your help

Our job is to help give you the information we all need to participate in building this country, while holding those in power to account. But now the power to help us keep doing that is in your hands

Press Releases

The online value of executive education in a Covid-19 world

Executive education courses further develop the skills of leaders in the workplace

Sisa Ntshona urges everyone to stay home, and consider travelling later

Sisa Ntshona has urged everyone to limit their movements in line with government’s request

SAB Zenzele’s special AGM postponed until further notice

An arrangement has been announced for shareholders and retailers to receive a 77.5% cash payout

20th Edition of the National Teaching Awards

Teachers are seldom recognised but they are indispensable to the country's education system

Awards affirm the vital work that teachers do

Government is committed to empowering South Africa’s teachers with skills, knowledge and techniques for a changing world

SAB Zenzele special AGM rescheduled to March 25 2020

New voting arrangements are being made to safeguard the health of shareholders

Dimension Data launches Saturday School in PE

The Gauteng Saturday School has produced a number of success stories