Islamabad: The Competition Commission of Pakistan (CCP) has imposed heavy financial penalties exceeding Rs1.5 billion 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 PKR 648,304,180 on Aisha Steel Mills Limited and PKR 914,236,980 on International Steels Limited.
According to the detailed order, both undertakings engaged in the most egregious form of anti-competitive conduct - price fixing - prohibited under Section 4(1) read with Section 4(2)(a) of the Competition Act. The Commission found 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 revealed that the 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 penalties, the CCP applied its Guidelines on Imposition of Financial Penalties, focusing on deterrence and the seriousness of the infringement. The Bench assessed the duration, gravity, and aggravating factors of the violation before deciding the penalty amount.
The order noted that flat steel is a critical commodity used in construction, automotive, appliances, and agriculture sectors. Any manipulation of prices in this essential market directly impacts consumers and the economy. The Bench observed that Pakistan's steel sector remains largely unregulated compared to jurisdictions like the United States, European Union, and United Kingdom, where strict oversight ensures transparency.
The Commission found that the cartel operated from July 2020 to December 2023, and that senior management, including the chief executive officers of both companies, were directly involved. No mitigating factors were identified to reduce their culpability.
Consequently, the CCP held that both undertakings committed deliberate and prolonged violations of the Competition Act and are not entitled to leniency. The fines represent 1% of each company's annual turnover for FY 2021-2022. Both companies must deposit the penalties within 60 days, failing which an additional penalty of PKR 100,000 per day and possible criminal proceedings under Section 38 will apply.
Background:
The CCP initiated an inquiry in May 2021 following complaints about parallel pricing patterns. On June 12, 2024, the Commission conducted search and inspection operations, uncovering crucial evidence of collusion. Price analyses confirmed identical and simultaneous price revisions between July 2020 and December 2023.
Show Cause Notices were issued in March 2025, outlining violations of Section 4 of the Act, which prohibits agreements or decisions that restrict competition.
The order concludes the long-standing case, reaffirming the CCP's commitment to curb cartelization and protect consumers from anti-competitive practices in key sectors of Pakistan's economy.