ISLAMABAD:
The Competition Commission of Pakistan (CCP) has unearthed monopolistic practices by two steel industry giants and imposed a fine of Rs1.5 billion for allegedly fixing prices.
The competition body has slapped penalties on Aisha Steel Mills and International Steels after finding them involved in cartelisation and price fixing in violation of Section 4 of the Competition Act, 2010. A CCP bench comprising Chairman Dr Kabir Ahmed Sidhu and Member Bushra Naz passed the final order and imposed the penalty of Rs648.3 million on Aisha Steel and Rs914.2 million on International Steels.
The bench determined that both undertakings had engaged in the most egregious form of cartelisation and price fixing, which is prohibited under Section 4(1) read with Section 4(2)(a) of the Competition Act.
The commission’s detailed order notes that Aisha Steel and International Steels coordinated pricing strategies, fixed flat steel prices and exchanged commercially sensitive information, thereby distorting competition and harming consumers. The inquiry report suggested that the steel cartel increased prices by an average of 111%, with raw steel prices surging by Rs146,000 per tonne over three years.
In determining the quantum of penalty, the bench applied its guidelines, which emphasise two key objectives: deterring undertakings from engaging in anti-competitive conduct and reflecting the seriousness of the infringement. The bench evaluated the seriousness, duration and aggravating factors before deciding the penalty.
The order highlights that flat steel is a critical commodity in Pakistan’s economy, used in multiple sectors including construction, automotive, appliances and agriculture. Any manipulation of prices has a direct impact on consumers, businesses and the overall economy. The bench observed that Pakistan’s steel sector remains largely unregulated compared to other jurisdictions such as the United States, the European Union and the United Kingdom, where regulatory oversight ensures transparency and accountability. The commission, therefore, underscored its responsibility to protect competition and consumers in such a vital sector.
The order found that the cartel remained operational for more than three years – from July 2020 to December 2023. The evidence presented in the inquiry and subsequent proceedings confirmed that senior management, including chief executive officers of both companies, was directly involved in the collusive conduct. No mitigating factors were identified that could reduce the culpability of either undertaking. Consequently, the bench held that both undertakings had committed deliberate and prolonged violations of the Competition Act and were not entitled to any leniency. The penalties represent 1% of the annual turnover of each undertaking for financial year 2021-22. Both companies have been directed to deposit the penalty within 60 days from the date of the order. Failure to comply will result in an additional penalty of Rs100,000 per day and may lead to the initiation of criminal proceedings under Section 38 of the Act.
The CCP had initiated the inquiry into the flat steel sector in May 2021 after receiving complaints about parallel pricing patterns among leading producers. The inquiry found evidence of cartel-like behaviour involving Aisha Steel and International Steels.
On June 12, 2024, the commission conducted search and inspection operations at the premises of both undertakings, uncovering crucial evidence of coordinated conduct, including identical price revisions and information exchange. A price analysis showed that both companies made identical and simultaneous price changes between July 2020 and December 2023, indicating collusion rather than independent pricing behaviour.
Following the investigation, show-cause notices were issued to both undertakings in March 2025, outlining violations of Section 4 of the Competition Act, which prohibits agreements and decisions between competitors that restrict, prevent or reduce competition in the market.
The order concluded a long-standing case, affirming the resolve to curb cartelisation and protect consumers from anti-competitive practices in key sectors of Pakistan’s economy.
