Court backs EU ruling to halt De Beers-Alrosa diamond deal

(LUXEMBOURG) - The European Court of Justice on Tuesday ordered the world's dominant diamond trader, South Africa's De Beers, to stop buying gems from global number two, Russia's Alrosa.

Judges backed European Union competition authorities' right to demand an end to a deal between the two companies, overturning on appeal an earlier ruling that rendered void a 2006 European Commission ban due to come in as of 2009.

The court concluded "that the commission did not make an error of law or a manifest error of assessment" in reaching its decision and dismissed the appeal launched by Alrosa.

The EU's executive welcomed the judgment, "making binding De Beers' commitments to end purchases of rough diamonds from Alrosa as of 2009," it said in a statement, referring to compromise offers made by the company over the duration of the case.

In 2002, the two companies entered into a five-year deal which would see Alrosa supply 800 million dollars' (655 million euros) worth of rough diamonds to De Beers each year.

EU competition officials argued that the deal enabled De Beers to control the price of diamonds.

Judgement of the European Court of Justice in Case C-441/07 - Commission v Alrosa - full texts