CCP fines Aisha Steel Mills Rs648 million and International Steels Rs914 million for price-fixing

The Competition Commission of Pakistan (CCP) has imposed heavy financial penalties on Aisha Steel Mills Limited (ASML) and International Steels Limited (ISL) after finding both companies guilty of cartelization and price-fixing in violation of Section 4 of the Competition Act, 2010. 

The CCP Bench, comprising Chairman Dr. Kabir Ahmed Sidhu and Member Ms. Bushra Naz, passed the final order, imposing a penalty of 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, according to a release issued here on Wednesday.

The Bench determined that both undertakings had engaged in the most egregious form of cartelization—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 ASML and ISL coordinated pricing strategies, fixed flat steel prices, and exchanged commercially sensitive information, thereby distorting competition and harming consumers. The CCP inquiry report suggested that the steel cartel increased prices by an average of 111%, with raw steel prices surging by Rs 146,000 per tonne over three years.

In determining the quantum of penalties, the CCP Bench applied its Guidelines on Imposition of Financial Penalties, emphasizing two objectives: deterring undertakings from engaging in anti-competitive conduct and reflecting the seriousness of the infringement. The Bench evaluated the duration, severity, and aggravating factors before determining the penalty amounts.

The order highlights that flat steel is a critical commodity in Pakistan’s economy, used in construction, automotive, appliances, and agriculture. Any manipulation of prices in this essential market directly affects consumers, businesses, and the overall economy. The Bench also observed that Pakistan’s steel sector remains largely unregulated compared to jurisdictions such as the United States, the European Union, and the United Kingdom, where oversight ensures transparency and accountability. The Commission underscored its role in protecting competition and consumers in such a vital sector.

The order further found that the cartel operated for more than three years—from July 2020 to December 2023. Evidence confirmed that senior management, including the chief executive officers of both companies, were directly involved in collusive conduct. No mitigating factors were identified. The penalties represent 1% of the annual turnover of each company for the financial year 2021–2022. Both companies have been directed to deposit the penalty within 60 days of the order. Failure to comply will result in an additional penalty of Rs 100,000 per day and may trigger criminal proceedings under Section 38 of the Act.

The CCP initiated an inquiry into the flat steel sector in May 2021 after receiving complaints about parallel pricing patterns among leading producers. The inquiry found prima facie evidence of cartel-like behavior involving ASML and ISL. On June 12, 2024, search and inspection operations at both companies uncovered coordinated conduct, including identical price revisions and information exchange. CCP analysis confirmed that both companies maintained identical and simultaneous price changes between July 2020 and December 2023, indicating collusion rather than independent pricing behavior. Show Cause Notices were issued in March 2025, outlining violations of Section 4 of the Competition Act.

The order concludes the long-standing case, affirming the CCP’s commitment to curbing cartelization and protecting consumers from anti-competitive practices in key sectors of Pakistan’s economy.