Pakistan Steel Mills found to have engaged in market manipulation

The Competition Appellate Tribunal (CAT) recently upheld a decision made by the Competition Commission of Pakistan (CCP) regarding Pakistan Steel Mills (PSM) and its abuse of a dominant market position in the sale of low-carbon steel billets. The Tribunal agreed with the CCP’s findings that PSM engaged in anti-competitive practices by showing favoritism to a specific buyer, which ultimately restricted fair access to essential steel products for other market participants. While the Tribunal acknowledged that a violation occurred, the penalty was reduced from Rs25 million to Rs5 million due to the limited time frame during which the misconduct occurred.

This case originated in 2009 when the CCP launched an inquiry after receiving media reports and a complaint from M/s Frontier Foundry (Pvt.) Ltd. The complaint alleged that PSM had displayed preferential treatment towards the Abbas Group, creating unfair disadvantages for other players in the market. Through its investigation, the CCP discovered that PSM had stopped the supply of low carbon steel billets without any valid justification between November 2008 and January 2009, thereby violating Section 3 of the Competition Ordinance, 2007, which prohibits abuse of dominance.

In its ruling, the Tribunal highlighted PSM’s failure to inform all potential buyers about product availability, effectively granting exclusive access to a specific buyer group. This conduct was deemed as market distortion and a clear violation of Sections 3(2)(g) and 3(2)(h) of the Ordinance. The decision is being hailed as a significant precedent in holding dominant market players accountable and upholding fair competition principles within Pakistan’s industrial sectors.

Meanwhile, notices have been issued to leading steel mills in Pakistan for cartelization, further emphasizing the importance of fair competition practices in the market. Additionally, there is good news for Alto buyers as the government has decided to drop the sales tax surge on small cars, potentially benefiting consumers. On the international front, tensions between Iran and Israel continue to escalate, with a comparison of military strengths projected for 2025. In terms of economic news, gold prices in Pakistan have dropped for the third consecutive day due to a global downturn, while the government has made a move to reduce sales tax on solar panels for the fiscal year 2025-26, encouraging the adoption of renewable energy sources. In response to political developments, Supreme Leader Khamenei of Iran has emphasized that neither war nor peace can be forced on Iran, signaling a stance against external pressures.