McDonald’s is feeling the heat in Europe
Burger chain accused of driving up costs via antitrust actions
McDonald’s was accused in three separate complaints Tuesday of improperly driving up consumer costs in France, Italy and Germany by forcing the company’s franchisees to swallow antitrust practices.
The fast-food giant abused its dominant market positions by requiring its franchise holders in the three European nations to display higher prices than those at company-operated sites, according to complaints that labor and consumer groups filed with competition authorities in those countries.
McDonald’s also charges excessively higher rents for franchise locations and imposes terms that restrict franchisees from shifting to other brands, the complaints allege.
For consumers in France alone, the alleged tactics in 2015 added up to an estimated $247 million, or 232 million euros, in higher McDonald’s prices, according to the complaint being filed with the French Competition Authority by Indécosa-CGT, the Association for the Information and Defense of Salaried Consumers.
McDonald’s franchisees set their own menu prices, and the company works closely with the operators “so they have the support they need to operate their restaurants and provide a great quality, experience and convenience for our customers,” spokeswoman Terri Hickey said in a statement.
The European Commission is also investigating complaints McDonald’s improperly lowered its European tax bills by transferring royalties to Luxembourg, where it faced lower levies. Denying the charges, McDonald’s said it complies with all European tax laws and pays a “significant amount” of corporate income tax.
In France, McDonald’s has nearly 1,400 locations, including more than 900 franchised restaurants, according to Indécosa-CGT. Germany has roughly 238 franchise operators.