The Competition Tribunal has upheld a regulator’s decision to impose a KSh 46.3 million penalty against Devki Steel Mills for price fixing in collaboration with 13 other steel firms, dismissing the company’s appeal.
- •The Tribunal found that Devki’s market behavior in 2020 and 2021, including the simultaneous release of price lists and coordinated changes in product specifications, constituted anti-competitive conduct under the law.
- •It upheld the verdict by the Competition Authority of Kenya (CAK) to fine the company 0.5% of its 2021 gross turnover and to compel it to implement a compliance program within 12 months.
- •The regulator based its findings on emails, spreadsheets, and WhatsApp messages collected during raids on the colluding steel firms.
The evidence revealed uniform price increases and restrictions on product supply that, according to the Tribunal, could not be explained by normal market conditions such as raw material cost fluctuations or exchange rate movements.
The mills that aided Devki in price fixing include Apex, Brollo, Tononoka, Insteel, Jumbo, Mabati Rolling Mills (MRM), Doshi, Accurate, Abyssinia, Corrugated, Nail & Steel, Tarmal, and Blue Nile. These companies were fined a total of KSh 338 million, with Corrugated Steel and Tononoka Mills receiving the highest penalties of KSh 86.9 million and KSh 62.7 million respectively.
CAK maintained that these firms used industry forums, including meetings within the Kenya Association of Manufacturers’ Metal and Allied Sector, to facilitate the exchange of sensitive information, ultimately driving artificially uniform pricing.
The Authority asserted that under Section 21 of the Competition Act, even indirect coordination or circumstantial evidence is sufficient to establish cartel conduct, making the company liable for penalties and compliance measures.
The verdict confirmed that the regulator acted within the law in its investigations, rejecting Devki’s arguments of procedural irregularities, data protection breaches, and miscalculated penalties. The Tribunal ruled that electronic evidence was properly admitted and that the regulator gave the company adequate opportunity to respond.
“It is our finding that the appellant (Devki) has not proved to our satisfaction the violation of their clients’ rights under the constitution. The respondent (CAK) has demonstrated through evidence that there were various meetings held through e-mails and physical meetings by undertakings in the steel sector,” the ruling stated.