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De Beers Monopoly Case Study

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Eileen Kelley

on 11 March 2013

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Transcript of De Beers Monopoly Case Study

Eileen Kelley Monopoly Case Study Diamonds are forever... Background De Beers Power of the Firm Controls 60% of all rough diamonds
Controls rarity and value
Makes diamonds a lucrative industry
Dealings were shady
Ruthlessness against their competitors.
July 12, 2004 Hopkins v. De Beers (CA)
February 28, 2005Cornwell v. DB Investments (AZ)
February 17, 2005 Null v. DB Investments (IL)
April 13, 2001 Leider v. Ralfe
September 20, 2001 Anco Industrial Diamond Corp. v. DB Investments
August 25, 2004 British Diamond Import Company v. Central Holdings Natural Monopoly Not a Natural Monopoly
Price would go down with more firms Positions Plaintiff: Shawn Sullivan, Arrigotti FINE JEWELRY, James Walnum on behalf of Hopkins, Cornwell, Null, Leider, Anco and British Diamond actions.

Defendant: De Beers and various entities related to De Beers Plaintiff Violations of federal and state
antitrust laws
Consumer protection laws
Deceptive trade practices
Unfair competition
Suffered damages, paying more for diamonds Defeandent Deny allegations
Did not appear in any cases except Cornwell
No business directly in US
Court had no jurisdiction outside US
Outcome Assessments/Penalties Based in London and South Africa
1859 first reports of diamonds in South Africa’s Northern Cape
Controls 60% of uncut rough diamonds
1994 charged for conspiring to fix prices
$500 million in industrial gems
Diamond jewelry $60 billion business
De Beers pleaded guilty
10 million dollar fine
Re-establish business in US a $60 billion industry
Executives long risked arrest, have avoided visits
De Beers full access to US market
US makes up half of worldwide market
Fine was "slap on wrist" to a multi-billion dollar company
After Affect of Trial
Full transcript