According to a document seen by Reuters, the Italian Anti-Monopoly Commission will investigate AGCM McDonald’s terms and conditions after a number of complaints about contracts with owner-operators.
If convicted of violating Italian no-confidence laws, the U.S. fast food chain could be fined up to 10% of its global sales.
McDonald’s, which generated $ 19.2 billion in revenue in 2020, said it was “sure our business is right” and that it was open to collaborating with the company.
According to the Italian competition watchdog, there appears to be an economic relationship between supermarket operators and McDonald’s.
The document, dated August 4, states that some of McDonald’s provisions in the license agreements cited by the complainants may have been pro-economic in the decision to open an investigation.
The Monitoring Committee noted that continuous diffusion and binding clauses in pricing, promotion, inventory, commodity and procurement, and financial management can be considered as elements of misconduct.
Distrust laws prevent companies from abusing another company’s economic affiliation through improper heavy or discriminatory contract terms, especially when the latter does not find a viable alternative.
With 85% of sales outlets operated by owners, McDonald’s is a major business model with about 615 restaurants in Italy, 85% of which are not wholly owned.
“Although we do not yet know the details of the investigation initiated by the Italian competitive authority, we are ready to cooperate with the authority and are committed to the proper nature of our work and the role that McDonald played in stimulating entrepreneurship. The country’s economy,” McDonald’s said in a statement.
The document states that McDonald has 60 days to respond to the announcement and that the investigation must be completed by December 31, 2022.
According to the document, McDonald’s appeared on the Italian regulator’s radar in March after three operators filed complaints about rent, royalties, the size of their investments and sales policies.
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