Photographer: Massimo Percossi/EPA

McDonald’s Accused of Harming Franchisees in Europe

  • Franchisees forced to charge higher prices, complaints say
  • Allegations add to McDonald’s problems on the continent

McDonald’s Corp. was accused of forcing franchisees in France, Germany and Italy to charge more in their restaurants than the company charges in stores it operates directly. 

Antitrust complaints were filed on Tuesday in those European nations, alleging that McDonald’s abused its market power to harm franchisees and customers, said Indecosa-CGT, a consumer organization affiliated with a French trade union. The group estimated the excessive pricing practices by McDonald’s French franchisees cost consumers an extra 232 million euros ($247.2 million) in 2015.

McDonald’s is “forcing customers of its franchised restaurants to bear unjustifiable price increases,” Martine Sellier, the association’s president, said by email.

Terri Hickey, a spokeswoman for McDonald’s, said the company invests heavily in programs to help franchisees succeed. “McDonald’s and our franchisees operate in a highly competitive marketplace, and our franchisees set their own menu prices,” she said by email.

McDonald’s shares declined by 0.3 percent to $129.26 at 1:10 p.m. in New York.

The criticisms add to McDonald’s woes on the continent. The company is under investigation by French authorities over an alleged strategy of shifting revenue to Luxembourg and Switzerland to avoid taxes. McDonald’s could also face a hefty tax recovery bill as European Union regulators put the final touches on a decision in a parallel case.

Last year, a coalition of Italian consumer organizations and European and U.S. trade unions urged the European Union to rein in alleged antitrust abuses by the world’s largest restaurant chain. The complaint was later withdrawn, the European Union said on Tuesday.

— With assistance by Leslie Patton, and Aoife White

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