Three Italian consumer groups have filed an antitrust complaint with the European Commission against McDonald's, alleging the burger giant is using its market power to gouge franchisees and consumers. In the U.S. and European trade union-supported complaint, the consumer groups - Codacons, Movimento Difesa del Cittadino and Cittadinanzattiva - argue that the McDonald's is violating EU rules by abusing its dominant market position to jack-up rents to franchisees with prices by up to 10 times above normal market rates, according to MarketWatch.
The group also says McDonald's has set 20-year-franchise contracts followed by one- to two-year non-competitive clauses which limit franchisees ability to switch to other brands. This, when combined with the increased rent, forces franchisees to charge inflated prices to consumers, the group says.
The coalition says the effects of McDonald's practices in Europe are most evident when comparing prices at franchise restaurants against company-operated restaurants. Their research indicates that 97 percent of menu items had higher prices at franchise outlets than in corporate-owned restaurants in Bologna, while in Rome the figure was 68 percent and in Paris, 71 percent, according to USA Today.
"No company is more responsible for driving a global race to the bottom than the Golden Arches, which has pioneered and perfected a brand of cannibal capitalism," said Scott Courtney, an official at the Service Employees International Union, which backs the antitrust complaint filed with the European Commission on Monday.
This accusation comes a month after the EU opened a probe in December to determine whether the burger giant avoided paying $1.09 billion in taxes across Europe by funneling royalties to Luxemborug, according to the Chicago Tribune.
In the meantime, the European Union said it received the filing and will look into it. It will either open a full investigation or drop the case after looking at the evidence. Companies found guilty of violating EU antitrust laws face up to 10 percent of their global revenue in fines.
