CCP Fines Steel Firms Rs1.56B for Cartelization

The Competition Commission of Pakistan (CCP) has levied substantial financial penalties on Aisha Steel Mills Limited (ASML) and International Steels Limited (ISL) after determining both entities guilty of cartelization and price-fixing, in breach of Section 4 of the Competition Act, 2010.

The CCP Bench, consisting of Chairman Dr. Kabir Ahmed Sidhu and Member Ms. Bushra Naz, issued the final order, imposing Rs 648,304,180 (Rupees Six Hundred Forty-Eight Million Three Hundred Four Thousand One Hundred Eighty only) on Aisha Steel Mills Limited and Rs 914,236,980 (Rupees Nine Hundred Fourteen Million Two Hundred Thirty-Six Thousand Nine Hundred Eighty only) on International Steels Limited, as detailed in a release issued on Wednesday.

The Bench ruled that both undertakings perpetrated the gravest form of cartelization—price-fixing—prohibited under Section 4(1) read with Section 4(2)(a) of the Competition Act. The Commission’s exhaustive order documented how ASML and ISL synchronized pricing strategies, fixed flat steel prices, and shared commercially sensitive information, thereby undermining competition and inflicting harm on consumers. The CCP inquiry report indicated that the steel cartel inflated prices by an average of 111%, with raw steel prices escalating by Rs 146,000 per tonne over three years.

In calculating the penalty quantum, the CCP Bench adhered to its Guidelines on Imposition of Financial Penalties, prioritizing deterrence against anti-competitive conduct and reflecting the infringement’s severity. The Bench weighed the duration, gravity, and aggravating factors to arrive at the penalty amounts.

The order stressed that flat steel is a cornerstone commodity in Pakistan’s economy, essential for construction, automotive, appliances, and agriculture. Any price manipulation in this vital market directly burdens consumers, businesses, and the broader economy. The Bench observed that Pakistan’s steel sector lacks robust regulation compared to jurisdictions like the United States, European Union, and United Kingdom, where stringent oversight ensures transparency and accountability. The Commission reaffirmed its mandate to safeguard competition and consumers in such a critical sector.

The order established that the cartel persisted for over three years—from July 2020 to December 2023. Evidence confirmed direct involvement of senior management, including the chief executive officers of both companies, in the collusive conduct. No mitigating factors were found. The penalties equate to 1% of annual turnover for each company in the financial year 2021–2022. Both entities have been ordered to deposit the penalties within 60 days; non-compliance will incur an additional Rs 100,000 per day and may invoke criminal proceedings under Section 38 of the Act.

The CCP commenced its inquiry into the flat steel sector in May 2021 following complaints about parallel pricing patterns among leading producers. The investigation uncovered prima facie evidence of cartel-like behavior involving ASML and ISL. On June 12, 2024, search and inspection operations at both companies revealed coordinated conduct, including identical price revisions and information exchanges. CCP analysis verified simultaneous and identical price changes between July 2020 and December 2023, pointing to collusion rather than independent pricing. Show Cause Notices were served in March 2025, detailing violations of Section 4 of the Competition Act.

This order resolves the protracted case, reinforcing the CCP’s resolve to combat cartelization and shield consumers from anti-competitive practices in Pakistan’s key economic sectors.