ArcelorMittal, the world's largest steel producer, expects to challenge a Euro 301.78 million (Rs2,000 crore) fine imposed by French competition authority Conseil de la Concurrence on French subsidiaries of ArcelorMittal engaged in steel distribution.

The fine follows an investigation started in 2004 by the DGCCRF (Direction Générale de la Concurrence, de la Consommation et de la Répression des Fraudes) into historical anticompetitive practices in the steel distribution sector in France, which started in mid 1999.

''ArcelorMittal takes matters of this nature extremely seriously and has a rigorous global compliance programme in place to combat anticompetitive practices,'' the company said in a release.

The company said it will review of the panel's decision and decide on an appeal, adding, ''At this time the company has no further comment to make on the situation.''

The fine comes after ArcelorMittal lost its legal battle against what it sees as unfairness in the way industries are covered by Europe's carbon trading system, in a ruling from Europe's highest court.

The competition council said it fined ArcelorMittal, Kloeckner Distribution Industrielle SA and eight other steelmakers and brokers a record Euro 575.4 million ($785.6 million) for price fixing. Among these companies are three units of ArcelorMittal.

The 3 units at ArcelorMittal were fined a total of Euro 301.7 million and Kloeckner's KDI unit was fined Euro 169 million, the Conseil de la Concurrence said today in Paris.

The fine comes as steel companies are cutting back production to weather falling demand from automakers and builders, in an effort to slow a freefall in prices sparked by the global credit crisis.

Luxembourg-based ArcelorMittal said in a statement that it would appeal the amount of fine. The company didn't contest the existence of the cartel and its penalty was reduced by 17 per cent, the French regulator said.

ArcelorMittal said last month that it may cut 9,000 jobs globally, or 3 per cent of its global workforce, to lower costs.

ArcelorMittal is the world's leading steel company, with over 326,000 employees in more than 60 countries.

In 2007, ArcelorMittal had revenues of $105.2 billion and crude steel production of 116 million tonnes, representing around 10 per cent of world steel output.