The U.S. Federal Trade Commission, which investigates allegations of deceptive advertising, said on Tuesday that it has sent warning letters to eight companies to insist that they distinguish in advertisements between diamonds that come from mines and those made in laboratories.
The FTC said that it had found instances where the eight companies advertised diamond jewelry "without clearly and conspicuously disclosing that the diamonds are laboratory-created," according to the letter.
The agency declined to identify the recipients of the letters. An unredacted version of one of the letters seen by Reuters identified that recipient as Diamond Foundry, a California company that makes laboratory diamonds.
The FTC said that it had found instances where eight companies advertised diamond jewelry "without clearly and conspicuously disclosing that the diamonds are laboratory-created"
Diamond Foundry declined to discuss whether the letter would lead to changes in its marketing. "We pride ourselves on being a lab grown diamond producer and this point of differentiation is what our success is built on," CEO Martin Roscheisen said in an emailed statement.
Analysts say increased production of laboratory-grown diamonds will lower the price of the stones.
The Diamond Producers Association (DPA), which represents mining companies like De Beers, Rio Tinto and Alrosa , welcomed the FTC insistence that companies distinguish between diamonds that are mined and those that are made in laboratories.
"The DPA has for several months expressed serious concerns about misleading marketing communication and unsubstantiated eco claims coming from many laboratory grown diamond marketers," said DPA Chief Executive Jean-Marc Lieberherr.
De Beers, a unit of Anglo American, said it was pleased by the move, adding the two kinds of diamonds were "distinct product categories."
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