EU receives complaint against McDonald's
Jan. 13, 2016
by Erica Shaffer
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BRUSSELS, Belgium – The European Commission must decide whether to accept a complaint against McDonald’s Corp. that claims the company is abusing its position as a dominant fast-food company in Europe. A coalition of Italian consumer groups and unions made the claims in a formal complaint lodged with the EC.
Specifically, the coalition claims that McDonald’s requires its franchisees to lease property owned by McDonald’s, which abuses its position as landlord by charging excessive rents. The group also accused McDonald’s of preventing competition between chains by imposing contract terms that limit franchisees’ ability to switch to other brands.
“The operational risks forced upon McDonald’s franchisees by restrictive contract terms result in an increased prospect of financial difficulties, poorer financial performance than competitors, and higher probability of default,” the coalition said in its complaint
McDonald’s defended its business practices with franchisees. The company already is under investigation on charges it received preferential tax treatment from Luxembourg.