Pakistan competition watchdog fines steel giants over PKR 1.5B for price-fixing

The Competition Commission of Pakistan (CCP) has imposed fines exceeding PKR 1.56 billion on two of the country’s largest steel manufacturers—Aisha Steel Mills Limited (ASML) and International Steels Limited (ISL)—after finding both companies guilty of cartelization and price-fixing in violation of the Competition Act, 2010.

The CCP’s bench, led by Chairman Dr Kabir Ahmed Sidhu and Member Bushra Naz, ruled that ASML and ISL colluded to fix flat steel prices, coordinate pricing strategies, and exchange commercially sensitive information, distorting competition and harming consumers.

According to the order, the CCP imposed a penalty of PKR 648.3 million on Aisha Steel Mills and PKR 914.2 million on International Steels. The Commission determined that the two companies engaged in “the most egregious form of cartelization”, prohibited under Section 4(1) read with Section 4(2)(a) of the Act.

The CCP’s inquiry found that the steel cartel increased prices by an average of 111%, with raw steel prices surging by as much as PKR 146,000 per tonne over three years.

In determining the penalties, the CCP applied its Guidelines on Imposition of Financial Penalties, which aim to deter anti-competitive behavior and reflect the seriousness of violations. The Commission said the collusion lasted more than three years—from July 2020 to December 2023—and involved senior management, including the CEOs of both companies.

“No mitigating factors were identified that could reduce the culpability of either undertaking,” the order stated.

Flat steel, a key input in industries such as construction, automotive, appliances, and agriculture, is a critical commodity for Pakistan’s economy. The CCP warned that manipulation in this market directly impacts businesses, consumers, and national economic stability.

The order noted that Pakistan’s steel sector remains largely unregulated compared to jurisdictions such as the United States, European Union, and United Kingdom, where regulatory oversight ensures transparency and accountability. The Commission emphasized its role in protecting competition and consumers in such a vital industry.

The penalties represent 1% of each company’s annual turnover for the 2021–2022 fiscal year. Both ASML and ISL have been directed to deposit the full amount within 60 days. Failure to comply will result in an additional daily penalty of PKR 100,000 and may lead to criminal proceedings under Section 38 of the Act.

Investigation details

The CCP began investigating Pakistan’s flat steel sector in May 2021 after receiving complaints about parallel pricing patterns among producers. The inquiry uncovered prima facie evidence of cartel behavior involving ASML and ISL.

In June 2024, the CCP conducted search and inspection operations at both companies’ premises, recovering evidence of coordinated conduct, including identical price revisions and information exchanges. Its price analysis confirmed that both firms made identical and simultaneous price changes between July 2020 and December 2023, indicating collusion rather than independent decision-making.

Show-cause notices were issued in March this year for violations of Section 4 of the Competition Act, which prohibits agreements or decisions that restrict, prevent, or reduce competition.

The CCP said the final order concludes a long-running investigation and reaffirms its commitment to curbing cartelization and protecting consumers from anti-competitive practices in key economic sectors.