Diamonds were once valued on the “Four C’s” – cut, colour, clarity and carat (size). The introduction and growing popularity of diamonds built in high-tech laboratories adds a fifth “C” – creation.

The distinction of whether a diamond was created by nature and time or by humans and technology poses serious complications for buyers, marketers and regulators. At the most basic level, manufactured diamonds are less costly to bring to market, and those costs are likely to head lower as operations expand and gain economies of scale.

Scientifically, the lab-created products may be identical to those found in the ground, chemically, physically and optically. Natural diamonds are forged in the pressure and heat below ground and most were formed between one and three billion years ago. Lab-grown diamonds are also created using extreme pressure and heat, but inside a machine, in a week or two.

But does this distinction matter to consumers, and if so, how should it best be communicated? U.S. Federal Trade Commission guidelines require sellers to include some modifier such as “laboratory-grown” or “simulated” to make the distinction clear, writing that “Describing simulated or laboratory-created diamonds merely as ‘diamonds,’ without more, would likely convey the false impression to consumers that they’re buying mined diamonds.”

Canadian Jewellers Association guidelines similarly note that “diamond” when used alone, should just be for natural (mined) diamonds, while “lab-grown”, “lab-created” or “synthetic” must be placed immediately preceding and given equal prominence to the word diamond. But the issue is largely unaddressed by Canada’s Competition Bureau or provincial consumer protection laws.

Other terms can similarly cause confusion. The FTC, for example, eschews terms like “real”, “genuine” or “natural” in the marketing of diamonds. And while the FTC allows the use of “synthetic”, manufacturers and marketers of lab-grown diamonds prefer to avoid that term, because it was once synonymous with cubic zirconia and other diamond substitutes.

Lab-created diamonds have been growing in market share, because they are lower cost, and therefore a larger diamond can be purchased for equivalent cost. Younger purchasers are also more receptive to environmental, social and corporate responsibility. Diamond mining has reputational issues related to artificially constrained supply, human rights exploitation and environmental damage.

Jewellery comprises about 30% of the diamond market; the bulk is used in drilling, cutting and mining, and in those sectors, price matters more than the green benefits to consumers.

While the Competition Bureau has staked no position on the product labelling, the CJA guidance notes that the Bureau’s 2008 guidelines on environmental claims may apply. That document warns against “vague or non-specific” environmental claims, so vaguely worded claims that lab-created diamonds are “environmentally superior” (for example), could be challenged.

Consumers looking for more information, or encountering questionable advertising about lab-created diamonds should contact the Competition Bureau or their provincial consumer protection office.