Debeers

9-700-082

REV. SEPTEMBER 06, 2002

DEBORA SPAR

Forever: De Beers and U.S. Antitrust Law

“As a worldwide dealer in enchanting illusions, Disney has nothing on De Beers.” - The Economist1 In 1999, a series of spectacular advertisements adorned the bus-sides and billboards of major American cities. Set against a lush black background, the ads displayed a perfect set of diamond earrings, or a single sparkling solitaire. The lettering, in white, was sparse and to the point: “What better time to celebrate the timelessness of love?” they asked. Or, “What are you waiting for, the year 3000?” Some were even more direct: “This wouldn't exactly be the year,” they noted, “to give her a toaster oven.” Coyly, the ads captured a joint fascination with the new millennium and the enduring allure of diamonds. How better to capture time than with a diamond, they urged. How better to herald eternal love? Indeed. According to analysts, U.S. diamond sales (30% of which occurred during the Christmas season) were expected to surge by more than 10%, hitting a high of over $20 billion for 1999.2 A significant portion of this windfall would flow to De Beers, one of the world’s most successful corporations and the controlling force of the international diamond market. There were many ironies behind De Beers’s millennial campaign, not least of which was that diamonds — those eternal gifts — had only been sold on the mass market for a hundred years. And that their allure was largely a creation of advertising. There also, though, were many stories buried behind the campaign — stories which ran to the core of the global diamond market and De Beers’s position within it. The millennial campaign, for example, was part of the company’s first attempt to brand gems, to sell a “De Beers diamond” rather than a regular diamond. This was revolutionary in a market where stones had always been centrally mixed and distributed, where De Beers’s power, in fact, stemmed from its ability to collect the...