EU Court Annuls De Beers-Alrosa Anti-Trust Deal
July 11, 07
The European Union's Court of Justice annulled the antitrust deal that ended Alrosa’s sales agreement with De Beers, calling the deal “manifestly disproportionate.”
The EU court decision Wednesday said regulators did not prove that the two firms formed a “dominant position” in the European market of the kind that would justify limiting their business.
The court said the “Commission merely accepted the commitments proposed by De Beers at face value, without looking for alternative solutions which might have better respected the contractual freedom of the parties.”
Under the 2004 deal, Alrosa and De Beers committed to the deal made under EC Treaty rules outlawing cartels and abuse of monopoly power involving the market for rough diamonds.
They were to gradually decrease rough diamond sales from $700 million annually to $400 million by 2009. At the time, the two had a five year, $4 billion rough diamond sales agreement.
Alrosa, who lost its most important client, requested from the court to cancel the ruling. Alrosa vice president Sergey Oulin told IDEX Online on the sidelines of the WFDB meeting in Amsterdam that the Russian miner decided to appeal the decision because “it violates our rights.”
Alrosa is the world's second-largest rough diamond producer after De Beers.
The European Commission has three months to appeal.