ISLAMABAD While its own fate hangs in balance, Competition Commission of Pakistan (CCP) has passed an excellent order against the Pakistan Steel Mills (PSM) abuse of dominant position in the market and imposed a hefty fine of Rs25 million on the Pakistan Steel Mills. The Competition Commission Ordinance 2009 would expire on March 28 while the enactment of competition law is still pending in the Senate. In case neither the law is enacted by Parliament nor the President re-promulgates the Ordinance before March 28, the Commission would seize to exist. Anyhow, taking a suo moto notice the Commission has found PSM as violating the Competition Ordinance by abusing the dominant position in the local steel market. Following are the extracts of the Order passed by the Commission against PSM that not only narrate findings but also explain imposition of moderate penalties on the Steel PSM: PSM abused its dominant position in the low-carbon steel market by refusing to deal with customers like FFPL in violation of Section 3(3)(g) of the Ordinance. While determining the amount of penalty to be imposed, we feel it is apposite to mention that whereas there is no binding or exhaustive list of criteria that must be taken into account while imposing penalty in every case this Commission has always been mindful of the stated Policy Objectives of the Fining Guidelines: To deter undertakings from engaging in anti-competitive practices; To reflect the seriousness of the infringement. Also relevant are the factors such as duration of the infringement, its seriousness and any other mitigating and/or aggravating factors. It is no secret that whereas cartelisation is generally considered the most egregious violation of competition law, abuse of dominant position can have equally deleterious effects on competition and the consumers. It is pertinent to point out that although the duration of the infringement was not very long, it did continue till the Commission intervened in the matter. Therefore, the corrective conduct appears to be a result of proceedings initiated by the Commission rather than independent efforts by PSM. We have also taken into account not only the specific circumstances but also the general context of the infringement. In this regard, it is particularly relevant that this infringement was born out of the conduct of a state-owned enterprise, indeed a state-owned monopoly in the relevant market, which was fully aware of the extent of the economic dependence on it of undertakings operating in the downstream market. It is our considered view that in a country like Pakistan state-owned enterprises must take extra-care to ensure that competition is not distorted because of their actions or, indeed, omissions. Barriers to entry for competitors to PSM are extremely high, and there are no plans in the foreseeable future for the establishment of comparable or competing steel mill in the country. Therefore, it behoves an undertaking in PSMs dominant position to take whatever steps necessary to promote fairness, transparency, and a reliable process in allocation of its coveted products. Every dominant undertaking has a special obligation to avoid engaging in a monopolistic or exclusionary manner, but particularly those that are entrusted by the state to produce those goods that would otherwise need to be imported. Also notable is the fact that this infringement would not have occurred without the active participation of the senior management of PSM. Without prejudice to the aforesaid, we acknowledge that the conduct of PSM has been co-operative since the change of its management in August, 2009 and that has also been a relevant factor taken into consideration. A balance needs to be struck between imposing a fine reflecting the infringement, its character and effect as well as the progressively co-operative conduct of the undertaking. This Commission has, in the past, held that competition law is at a nascent stage in Pakistan and therefore in many cases a measure of restraint has been exercised while imposing the penalty. In light of the above and under the circumstances, it is our considered view that Rs. 25 million would be an appropriate penalty to be imposed on PSM in this case. We have refrained from imposing a higher penalty which ordinarily would have been appropriate considering the gravity of the offence and instead imposed a relatively moderate fine, taking into account the fact that the abuse occurred for a period of three (3) months, pertained only to SAE 1080 and SAE 1010 billets which comprise a very small portion of the annual production at PSM, and that all the abuse occurred under the leadership of the then-Chairman who has since been removed. However, we caution the current and future leadership at PSM from engaging in anti-competitive conduct of any kind in the future. We would like to take this opportunity to reprimand PSM for abusing its dominant position; any future infringement of the Ordinance would be viewed most adversely by the Commission and justify the imposition of a far higher penalty.