A U.S. Diamond Bourse President Sues De Beers

The President of the Diamond Bourse of the Southeast United States is filing a “substantial” class action lawsuit against De Beers, claiming that its Supplier of Choice policy is preventing U.S. diamond traders from making a living.

Derek Parsons and his Miami-based British Diamond Import Co, charges that De Beers violates the Sherman Act by “controlling and monitoring” who its Sightholders sell to and discouraging sales to non-Sightholders, thus maintaining an artificially high price for polished diamonds.

This restrains competition for those outside the DTC network and damages their business, Parsons told IDEX Online.

Parsons’ launched the suit after years of fighting that he said got him nowhere.

He added that many officials at the World Federation of Diamond Bourses are either Sightholders or have other contacts with the DTC, thus preventing them from acting more forcefully to change the DTC’s policy.

New York diamond company W.B. David filed suit on July 1 in federal court in Manhattan against 90 defendants, including De Beers entities, their principals, the DTC, Diamdel, ad agency J. Walter Thompson, DTC Sightholders, their accountants and others for $100 million, injunctive relief and attachment of De Beers' U.S. assets.

W.B. David alleges that “De Beers' entire Supplier of Choice program is anticompetitive and illegal under U.S., New York State and probably European antitrust and unfair competition laws”.

They claim that rather than increasing competition for diamonds, it has decreased competition and effectively precluded former Sightholders, including W.B. David, from obtaining sufficient numbers of rough diamonds to remain competitive.