Just as things were looking up for the Golden Arches, trouble is once again on the horizon. This time, though, it’s not dissatisfied customers or protesting workers that McDonald’s needs to look out for; it’s European Union antitrust regulators.
The European Competition Commission is planning to announce an investigation into McDonald’s for a deal made with Luxembourg to lower the company’s tax bills, Reuters reports. The announcement is expected as early as Thursday (Dec. 3).
The commission has been urged to look more closely at McDonald’s by union organizations representing company workers in the US and Europe, as well as the charity War on Want, an international anti-poverty organization. In February, War on Want accused McDonald’s of diverting revenue to avoid over €1 billion in taxes from 2009 to 2013.
In October, European Competition Commissioner Margrethe Vestager told Starbucks it owed up to $34 million in taxes it avoided through illegal state aid from the Netherlands. EU competition officials said Fiat had a similar deal with Luxembourg.
In a statement to Quartz, a McDonald’s spokesperson said the company complies with all European tax laws and rules. “In fact,” she wrote in an email, “from 2010-2014, the McDonald’s Companies paid more than $2.1 billion just in corporate taxes in the European Union, with an average tax rate of almost 27%.” The company, she says, also pays “social, real estate and other taxes” and independent franchisees pay taxes as well. “While we have not been notified by the European Commission, we are confident that should an inquiry occur, it would be resolved favorably.”
The commission declined to comment.