Get 40% Off
These stocks are up over 10% post earnings. Did you spot the buying opportunity? Our AI did.Read how

McDonald's faces complaints in Europe over franchise terms

Published 04/04/2017, 18:18
© Reuters. View of McDonald's logo in Paris

By Foo Yun Chee

BRUSSELS (Reuters) - French, German and Italian groups urged their national competition authorities on Tuesday to look into alleged anti-competitive practices by McDonald's (N:MCD), potentially putting the U.S. fast-food chain on course for multiple investigations in Europe.

The three complaints share similar concerns about McDonald's franchising terms and conditions, including prices set for products sold at franchises, saying consumers are charged more than at McDonald's own stores as a result.

With more than 80 percent of its outlets worldwide not company-owned, franchising is an important business model for the company.

The French competition authority confirmed it had received a complaint but declined further comment. The German and Italian antitrust authorities did not immediately respond to requests for comment.

McDonald's rejected the allegations.

"Our franchisees set their own menu prices. Our business model helps our franchisees secure prime real estate locations and reflects a significant level of company investment in the restaurant premises as well as through training expertise and well-established, high-quality supplier networks," spokeswoman Terri Hickey said.

In a legal memo setting out its complaint to the French competition authority seen by Reuters, French consumer body Indecosa-CGT, which has 672,000 members, said McDonald's France forced franchisees to charge higher prices than at its own stores.

German law firm SKW Schwarz filed a similar complaint to the German cartel body on behalf of a group that it declined to name.

The document seen by Reuters cited alleged anti-competitive clauses such as the tying of franchising deals with lease agreements, restrictions on suppliers and excessive rent for premises.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Italian consumer groups Codacons, Movimento Difesa del Cittadino and Cittadinanzattiva said on Tuesday they would withdraw a 2016 complaint to the European Commission because of the slow pace of procedure and take it to the Italian watchdog instead.

The Commission confirmed the withdrawal.

The national competition agencies can impose fines up to 10 percent of a company's global turnover for breaches of antitrust rules as well as ordering them to stop unfair practices.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.