Will the Antitrust Authority fry McDonald’s with a fine? All the details
The Agcm will investigate the terms of the contracts imposed by McDonald's on the Italian franchising branches. If the abuse is confirmed, the company risks a fine of up to 10% of its global turnover
The Antitrust Authority ( Agcm ) will investigate the terms and conditions imposed by McDonald's on the Italian branches managed through franchising. The news agency Reuters writes exclusively, which has viewed an Agcm document containing several complaints from operators affiliated to the well-known US fast food chain; a document that will appear – according to the indiscretions collected by Start Magazine – in the next bulletin of the authority chaired by Roberto Rustichelli.
FINE ON 10% OF TURNOVER
Should the authority find McDonald's guilty of breaking Italian antitrust rules, the company would risk a fine of up to 10 percent of its global turnover. McDonald's posted profits of $ 19.2 billion last year.
MCDONALD'S COMMENT
The Agcm has not issued any statements. McDonald's Italia, on the other hand, said it was “certain of the correctness of our work” and was willing to collaborate with the authorities.
WHAT THE DOCUMENT IN THE HAND OF THE AGCM SAYS
In the Agcm document viewed by Reuters – dated August 4 last and consisting of 13 pages – we read that, based on the information available, it would seem that there is a type of relationship of economic dependence between the managers of the various branches and the central company that could constitute abuse.
Authority refers to a number of pervasive clauses in McDonald's contracts relating to pricing, promotions, supplies and financial management that could be deemed abusive behavior.
Antitrust legislation in fact prohibits companies from abusing the economic dependence of a company on it through unjustifiably burdensome or discriminatory contractual conditions, especially when the company does not have an alternative to the company.
FRANCHISING FOR MCDONALD'S
Franchising is a very important business model for McDonald's: 85 percent of its branches are managed through this formula. The chain owns 615 restaurants in Italy, 85 percent of which are not directly owned by the company.
SURVEY TO BE CLOSED BY THE END OF 2022
The AGCM document states that McDonald's will have sixty days to respond to the authorities after being informed of the investigation. Investigation to be completed by 31 December 2022.
McDonald's came under the antitrust lens after three branch operators filed complaints last March about rental prices, royalties, sales policies and the scope of investments required.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/mcdonalds-antitrust-multa/ on Tue, 10 Aug 2021 14:22:25 +0000.