De Beers on Wednesday agreed to pay $250 million to settle a group of consumer-driven class-action anti-trust lawsuits.
In the lawsuits, a group of consumers alleged that De Beers owed them money for keeping diamond prices high in violation of American anti-trust laws. This settlement does not involve any admission of liability on De Beers’ part. It is subject to court approval.
As these were class-action suits, part of the settlement will, in theory, be owed to every consumer that purchased a diamond in the last 11 years. It remains to be seen how that money will be disseminated.
According to a report on Bloomberg news service, as part of the settlement, De Beers agreed to abide by American anti-trust laws.
Spokeswoman Lynette Hori said, “We are confident that our business model is legally robust and that we are fully compliant with US law, as well as the laws of jurisdictions where we do in fact conduct our business activities.”
All this does not settle De Beers’ American legal problems: It still several thorny, and possibly more expensive, lawsuits outstanding—including one from defrocked sightholder W.B. David, one alleging anti-competitive conduct from Anco Industrial Diamond, and another from Derek Parsons, the head of the Miami diamond bourse, charging that De Beers is eliminating industry middlemen.
De Beers spokesman Andy Bone said that eventually De Beers hopes to settle all the suits.
“It is part of our general strategy to put all of these things behind us,” he said.
De Beers has previously indicated that these suits are preventing the company from establishing an official presence in America. But Bone told &I>JCK&/i> that regardless of what happens with the suits, De Beers is not currently interested in entering the United States.
In a statement, De Beers managing director Gary Ralfe called settling the suits “the most sensible and responsible course of action for the company to take.”
Jared Stammel, a New York attorney involved in several of the lawsuits against De Beers, said the settlement was a “good move and step forward for the company.”
The settlement impacts several consumer anti-trust suits, including one recently filed in Madison County, Illinois. Another consumer-driven case, Leider vs. Ralfe-the first of its kind which has been so far unsuccessful in getting damages-will cease as the result of this settlement.