The Competition Commission has referred a collusion case against ArcelorMittal (Mittal) and its smaller competitor, Evraz Highveld Steel and Vanadium (Highveld), to the Tribunal for alleged price fixing and market allocation in respect of flat steel products.

The Commission's investigation was partly predicated on a complaint that Mittal and Highveld were increasing steel product prices by similar increments at around the same time, which the Commission concluded was evidence of an understanding that Highveld would follow Mittal's price changes, including the variation of discounts and transport tariffs. This may prove controversial, as it seems to elevate the phenomenon of "conscious parallel conduct" (whereby smaller players tend to follow price increases by larger "price leaders" in a transparent market) from merely being evidence of structurally uncompetitive market, to anti-competitive conduct. This must be of concern to any players in a transparent market who behave rationally in following pricing of competitors with pricing power.

Written by Chris Charter, Director, Competition practice, Cliffe Dekker Hofmeyr