The head of the Diamond Bourse of the Southeast United States has filed a $3 billion class action lawsuit against De Beers, charging that its Supplier of Choice policy deprives American dealers of their livelihood.
The suit, launched by bourse president Derek Parsons and his Miami-based British Diamond Import Co., claims De Beers violates the Sherman Act by “controlling and monitoring” who its sightholders sell to and discouraging sales to non-sightholders, which keeps the price of polished diamonds “artificially high and at non-competitive levels” and “restrains competition” from those outside its network.
“Plaintiffs and other class members have been injured in their business … by being unable to purchase polished diamonds, except at prices higher than they otherwise would have paid in the absence of [De Beers”] unlawful conduct,” the suit says.
The suit was not launched on behalf of the Miami bourse, although Parsons’ affiliation is mentioned in the suit and its board voted in favor of the action
“I’m representing every diamond dealer in America,” says Parsons, who when contacted by JCK had closed up his office and moved to a hotel to avoid the effects of Hurricane Frances. “Most diamond dealers are horrified at what’s been going on. We’re being starved of supply. Our businesses are suffering dramatically. De Beers can’t expect to come into America and crush 60% to 70% of the diamond dealers here and not expect a fight.”
Parsons says he decided to launch the suit after “four years of political fighting that got nowhere.
“A lot of the officials in the World Federation of Diamond Bourses are either sightholders or have some dealings with De Beers, and because of that, and how vulnerable they are, they have not been able to achieve the things they say they want,” he says. “The only thing De Beers has done is supply small qualities of rough through Diamdel, and that was just to say they were doing something.
“I am not trying to hurt De Beers,” he continues. “They are an important part of our industry. But why are they trying to hurt [dealers] so much? And when you put someone in a corner, they are going to fight back.”
Parsons’ lawyer, Jared Stammel, has sued De Beers at least twice before, both times regarding industrial diamonds. De Beers said it “was not yet aware” of the lawsuit so had no comment to make.