Why is DeBeers allowed to exist?

Why is this violent monopoly that keeps the price of diamonds inflated so that they remain a commodity not ever threatened with anti-trust litigation?

My guess is that nobody has any economic interest in their breakup.

Break up the monopoly, and diamonds become as common and as valuable as cubic zirconia - and no woman in this country wants her $5,000 ring to suddenly be worth $200.

Add to that the retailers and workers and jewelers in the industry at numberless marketing levels, and it all adds up to a powerful lobby for the status quo.

According to the Wikipedia article on the comany, it’s incorporated in Luxemburg, so any anti-trust action would have to take place there. Another country’s government could keep them from doing business inside their borders, but that would mean no diamonds in that country. That probably wouldn’t be too popular.
There have been lawsuits involving price fixing, though.

Nah, there are plenty of other diamond suppliers. Trouble is, a concentrated effort to (heh) undermine De Beers just encourages them to start selling their diamonds more cheaply. A nation might decide to make a moral decision to allow only blood-free “Polar Bear” Canadian diamonds in, but if smugglers can bring in De Beers rocks (with counterfeit etchings and no official support from De Beers itself, wink-wink) and sell them for less, how much of your nation’s law-enforcement energy do you want to throw at this?

They aren’t a monopoly, for one thing.

When diamonds of gem quality become an essential to national security, then maybe someone will care to take action. So long as they are a luxury item, no action will or should be taken. So what if they keep the price artificially high? Gem diamonds aren’t essential for anything.

Obviously you haven’t been listening to engagement ring commercials. Why, if a guy won’t spend [del]two[/del] [del]three[/del] [del]four[/del] six months salary on a diamond engagement ring, he’s just not that into you, darling. Or, from the film Roger Dodger:Roger: You can’t sell a product without first making people feel bad.
Nick: Why not?
Roger: Because it’s a substitution game. You have to remind them that they’re missing something from their lives. Everyone’s missing something, right?
Nick: I guess.
Roger: Trust me. And when they’re feeling sufficiently incomplete, you convince them your product is the only thing that can fill the void.
Love is ephemeral; diamonds are forever, baby…or, at least if you get them listed in the prenup.


This guy doesn’t want that either.

Here is Cecil’s take on diamond prices and De Beers. Is a diamond’s price a true measure of its value?

Note that DeBeers executives can’t visit the United States or they might be arrested. DeBeers IS a monopoly, but US law only has jurisdiction in the United States. So DeBeers sells diamonds to middlemen outside of the US and those middlemen import the diamonds to the US.

Then why is DeBeers allowed to advertise? Is that protected speech?

In that there is no reason for them to be silenced, and they have broken no laws in this country by buying advertising time, that is “protected.” But I’m will to bet that the ads were paid for by a US company acting for DeBeers, not DeBeers itself.

DeBeers is not a monopoly, as there are plenty of other suppliers of diamonds outside the cartel.

I think a better word is Trust.

On what charges?

The US has no jurisdiction on how businesses are run in other countries.

As for the claim by mswas that de Beers is a “violent” monopoly, that is pure, unadulterated drivel.

Can you cite that last statement. It counters popular opinion and much that I have read? I would like to be properly educated if your claims that it was drivel is true. Fight some ignorance today.


A monopoly is strictly defined as one and only one provider of a product or service in a given market. I think DeBeers has a hand in about 40% of global diamond transactions, so that’s no where near a monoploly.

That doesn’t mean they have no market power, but there are lots of ways to have market power without a monopoly. For example, OPEC produces about 40% of the world’s oil; OPEC has some market power, but is not a monopoly.

Market power, by the way, is the ability of a firm to influence the market price. A local corn farmer, for example, has no market power because he can’t move corn markets by withholding output.

As to the claim of a violent monopoly, I’m not sure, but I do know I get pretty violent at monopoly if I don’t get to be the race car.

Maybe because diamonds in that form are pretty much useless except as a decorative object? Its not like if one company had control of most of the worlds water supply. Didn’t they “create” the current demand for them in the first place? We have a product, we make you want the product, and we control the price. Seems to me like the diamond buyers are the ones at fault.

I assume the drivel part refered to the bloody part and not the monopoly part. I assumed that Aquila Be was prepared to show us that DeBeers was not a violent company.

I don’t think a technical misuse of the word monopoly would result in the use of the insulting phrase “unadulterated drivel”. I could be wrong.


While it is certainly true the DeBeers is not a complete monopoly, the essential point is that they have, as I understand it, done what they can to control as much of the market as possible so they can charge a price far above what a free and competitive market would bring. They have been very successful and the great majority of their profits have been made, not by providing better quality and price, but by stifling competition.