The court said the EC's bid to limit business between the two diamond producers is "clearly disproportionate," adding there was no evidence to show that the two companies together hold a "dominant position" in the EU market, which might justify restricting business freedom.
"The Decision produces effects which are disproportionate in the light of the objective pursued by Article 82 EC of maintaining undistorted competition. It completely rules out the possibility previously open to Alrosa of entering into a contractual relationship with De Beers," the court said.
The EC claimed that De Beers held an unchallenged position on the diamond market, and De Beers assumed legally binding commitments to stop buying rough diamonds from Alrosa.
But Alrosa appealed the ruling to the Luxembourg-based EU court, saying the case was without merit.
Following the European Commission's decision, Alrosa, which holds 23% of the world diamond market, and De Beers signed a memorandum on supplying rough diamonds in 2006-08, gradually phasing out De Beers' purchases.
Under the deal, De Beers was to purchase 500 million euros worth of rough diamonds from Alrosa in 2006, 420 million in 2007 and 340 million in 2008.
De Beers controls about 60 percent of the world's rough diamond supplies and produces 43 percent of world output.
De Beers faced fines of up to 10 percent of its total turnover if it failed to adhere to the EU antitrust agreement.
