(CN) – Europe’s top court on Tuesday upheld the European Commission’s approval of a unilateral commitment by De Beers SA, the world’s largest diamond producer, to stop buying uncut diamonds from a Russian supplier.
Russian diamond producer Alrosa Co. and De Beers had asked the commission in 2002 to approve a five-year trade agreement whereby Alrosa would sell $1.5 billion worth of rough diamonds to De Beers.
The commission blocked the agreement, citing concerns that De Beers would dominate the global diamond market. It wanted De Beers to buy fewer rough diamonds from Alrosa to increase competition.
De Beers agreed to stop buying rough diamonds from the Russian supplier after 2008, but did so without consulting Alrosa. The commission approved the arrangement.
Alrosa sued, challenging De Beers’ commitments as excessive and claiming the commission violated its right to be heard.
The lower court sided with Alrosa, but the Court of Justice in Luxembourg backed the commission’s approval.
“In adopting the decision, the commission didn’t make an error of law or a manifest error of assessment,” the high court wrote.
Alrosa supplies about 20 percent of the world’s rough diamonds. De Beers produces and sells about 40 percent of the world’s supply of rough diamonds.