McDonald’s Corp. could face fresh regulatory headwinds in Europe after three Italian consumer groups filed an antitrust complaint with the European Union alleging that the fast-food chain imposes illegal terms on its franchisees.
The complaint, which is supported by U.S. and European trade unions, alleges that McDonald’s abuses its dominant market position and harms consumers by charging its franchisees rents that exceed market rates by up to 10 times, and by limiting their ability to switch to other brands.
It comes a month after EU regulators opened a full-blown investigation into McDonald’s tax affairs in Luxembourg, as part of a widening inquiry into unfair tax sweeteners for multinationals.
The unions claimed that the company had avoided about €1 billion in taxes by funneling royalties to Luxembourg.