After receiving McDonald's CorpAfter the franchisee's complaint, AGCM, the Italian antitrust agency, will investigate the terms and conditions of the agreement between McDonald's Corp and the franchisee. McDonald's Corp could face a fine of up to 10 per cent of its global turnover if convicted of violating Italy's anti-monopoly law, with revenues of $19.2 billion in 2020.
According to the Italian competition regulator, based on the information available, there appears to be an economic dependence between the McDonald's Corp franchise store operator and McDonald's Corp.
According to regulatory documents, some of the provisions of the franchise agreement cited by the plaintiff may constitute abuse of economic dependence.
Regulators said McDonald's Corp's widespread and binding provisions on franchise prices, promotions, inventory, supply and procurement, and financial management could be seen as part of abuse.
Anti-monopoly laws prohibit companies from abusing another company's economic dependence through unreasonable burdens or discriminatory contractual conditions, especially when the latter is unable to find viable alternatives.
85 per cent of McDonald's Corp's stores in Italy are run by franchisees, which is McDonald's Corp's important business model. It has about 615 restaurants in Italy, 85% of which are not owned by itself.
Italy's McDonald's Corp said: "although we do not yet know the details of the investigation launched by the Italian competition agency, we are willing to work with regulators, and we are sure that the correctness of our work and McDonald's Corp's role have and continue to stimulate entrepreneurship." support the Italian economy. "
McDonald's Corp found himself under investigation by AGCM after three franchisees complained in March about rents, royalties, investment scale and sales policies, according to the document.