De Beers pleaded guilty Tuesday to charges in a 10-year-old price-fixing case, clearing the way for the diamond giant to resume selling diamonds directly in the lucrative U.S. market, The Associated Press reports.
The company agreed to pay a $10 million fine after pleading guilty in a Columbus, Ohio courtroom to conspiring to fix prices in the $500 million industrial diamond market, the AP reports.
De Beers has sold diamonds in the United States only through intermediaries since shortly after World War II, when it was first charged with price fixing.
The company was charged along with General Electric Co. in 1994. A judge dismissed the charges against GE, saying the government had failed to prove its case.
U.S. District Judge George Smith accepted the plea in the case, in which the Department of Justice charged De Beers with keeping prices in the worldwide industrial diamond market artificially high.
The case was filed in Columbus because GE’s industrial diamond business was headquartered in suburban Worthington. Industrial diamonds are used to make cutting and polishing tools for a variety of manufacturing and construction applications.
De Beers has no specific plans yet for the U.S. market, Lynette Hori, spokesman for De Beers in London, reportedly said.
“It doesn’t make a big difference in the way we do our business,” she reportedly said before the hearing. “We operate a selling system to our clients from London and Johannesburg, and we have no plans to change that.”
De Beers had sales of $5.5 billion and earnings of $676 million in 2003. The company spends $180 million on advertising.
The United States represents half of the worldwide diamond market.
Prosecution of De Beers has been difficult because U.S. officials have no jurisdiction over the company, which is based in South Africa.
But the case also has hindered De Beers from doing business in the United States, said antitrust lawyer John Majoras, a partner with the law firm Jones Day in Washington.
Corporate officials trying to enter the United States run the risk of being stopped by authorities, he said.
“That’s a pretty big market to give up and not be actively involved in,” he reportedly said.
On the down side, Majoras said the deal could expose De Beers to more lawsuits from plaintiffs who now think it is easier and less costly to sue the company.
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