Attorney General Kelly A. Ayotte announced today that the Attorney General’s Office has entered into a settlement with Simon Property Group and Sterling Jewelers for alleged violations of New Hampshire’s antitrust laws.

According to documents filed with the Merrimack County Superior Court, the State alleges that in 2002, Simon Property Group agreed to rent a retail space in the Pheasant Lane Mall to David Bellman, a Manchester jeweler, so that Mr. Bellman could establish a kiosk where customers could have their jewelry appraised. Later, Mr. Bellman decided to change his business in the mall to one where he would sell unmounted diamonds. Simon approved the change, and in the autumn of 2003, Mr. Bellman reopened his kiosk under the name Diamonds Direct, and began selling diamonds to the public.

Sterling Jewelers, Inc., owns and operates jewelry stores in the mall under the name of Kay’s Jewelers and Belden’s Jewelers. The state alleges that shortly after Bellman reopened his kiosk and began doing business as Diamonds Direct, he was told that his lease was being terminated. The State alleges that the reason for the premature termination of Diamonds Direct’s lease was the result of complaints relating to Diamonds Direct’s discount pricing that were lodged by competing jewelers, primarily Kay’s Jewelers, which was located in close proximity to Bellman’s kiosk.

“Both the New Hampshire Constitution and statutory law establish that free and fair competition is the policy of this state. Thus, business must be conducted in a competitive environment,” Attorney General Ayotte said. “When my office learned that a business may have been forced out of the shopping center primarily because of its policy of competing aggressively on pricing, action was necessary. We will ensure that a competitive marketplace exists within the state.”

Both Simon Property Group and Sterling Jewelers, Inc., have executed Assurances of Discontinuance with the Attorney General’s Office. Under the terms of the agreement, they have agreed to reimburse the state for its investigative costs, and to maintain a competitive environment in their business activities in New Hampshire in the future. Both Simon Property Group and Sterling Jewelers, Inc., deny any wrongdoing.