Italy’s competition watchdog has closed a probe into McDonald’s Corp. on alleged abuse of market dominance against its franchisees in the country, saying it was satisfied with changes the Chicago-based fast-food chain had made to its contractual standards.
The Italian Competition Authority, or AGCM, said Thursday that McDonald’s Development Italy had significantly altered its approach on how it handles the pre-contractual phase, giving potential new franchisees more visibility on obligations and commitments in agreements they are going to sign, while also reducing costs for training.
The regulator opened its probe in July last year, saying it suspected the company’s handling of the pre-contractual phase took away negotiating power and alternative choices from prospective franchisees, thus stifling competition.
“The authority found MCDI’s proposed commitments adequate to remove competition concerns related to all the profiles of abuse of economic dependence alleged in the opening proceedings,” the watchdog said.
In a statement, McDonald’s Italian business said that dialogue with the regulator had “allowed the company to fully illustrate the correctness of its franchise model”.
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