Food franchise giant, McDonald's, has been accused of anti-competitive terms on its franchise in Europe. Three Italian food groups are behind the alleged accusations.
With full support from the Service Employees International Union (SEIU). Codacons, Movimento Difesa del Cittadino and Cittadinanzativva are the three Italian company that filed a complaint to the European Commission. They have stated that McDonald's used its dominance in the market to charge above market rates to franchisees who borrowed property from the corporation. The complaint stated that the company requires its franchisees to lease property from them with higher rates than normal. And prevents them to switch brands due to the non-compete clause agreement. As an effect, consumers also suffer because the franchise owners now charge their customers a much higher price.
SEIU organizers and workers testified against McDonald's in the Brazilian Federal Senate last August. It opted the Senate to open a Parliamentary Commission of Inquiry to investigate on the matter. On the same month, the European Union regulators started to look into McDonald's tax practices in Luxembourg and it has found out that the company avoided $1.09 billion worth of taxes. In a statement given by the Director at SEIU, Scott Courtney. He said the McDonald's abuse its dominance in the market and has affected every franchisee, workers and consumers alike.
Despite the allegations, McDonald's has maintained its belief that it's proud of its franchisees. And will always be committed to work hand in hand to support the operation of the business. They adhere to the principle of risk sharing and reward and for years has been successful with it and has been giving their customers the best overall experience.
The blocs top antitrust authority, The European Commission. Confirmed that they had already received the complaint and will take a closer look on it. After evidence has been presented, it will decide for a full on investigation or on the other hand, dismissal of the whole case. If found guilty by the Commission of violating the EU antitrust law, the franchise giant may be fined with up to $9 billion dollars.
