News

Mcdonald's faces European antitrust suits

April 5, 2017

Consumer groups in three European nations have got a beef with McDonald's these days that has little to do with the chain's ubiquitous burgers, but rather revolves around what plaintiffs in three antitrust suits said is pure corporate greed. 

The story, reported in USA Today, said the European Commission is now investigating complaints filed Tuesday by consumer and labor organizations there that the chain's European arm was unfairly pushing up its menu prices in France, Italy, and Germany by mandating that franchise holders in those three nations set higher menu prices than those at corporate-owned stores. The complaints also allege that the company sets higher rents for franchise locations while making certain stipulations that prevent franchisees from moving to other brands. 

"Ultimately, whether one is an employee, a consumer, or a citizen, we are all victims of Ronald McDonald's limitless greed," according to a statement from one of the organizations involved in the complaints  —  Indecosa-CGT.

At the same time, USA Today reported that the European Commission is also investigating whether McDonald's lowered its European tax bill by moving royalties from other countries to Luxembourg, where levies are lower. McDonald's countered that it pays a "significant amount" of corporate income tax in Europe.

"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," a McDonald's spokesperson, Terri Hickey, said in a formal statement released by the company. "As a result, McDonald's and our franchisees foster economic growth and create jobs in communities throughout the world."

In the three European countries involved in the complaints, McDonald's has about 2,300 locations with most located in France.