McDonald's Being "Called Out Worldwide" as Brazil Opens Probe

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McDonald's Being "Called Out Worldwide" as Brazil Opens Probe

Prosecutors' inquiry is further evidence that McDonald's is "driving a global race to the bottom."

Local unions allege McDonald's has organized its business in Brazil in a way that allows it to avoid taxes, skirt compliance with local franchise laws, and engage in anti-competitive behavior that disadvantages competitors and consumers alike. (Photo: Mike Mozart/flickr/cc)

As the fight against McDonald's expands its global front, federal prosecutors in Brazil have opened a probe into the fast food giant and its main operator in Latin America, Arcos Dorados, for alleged violations of tax, labor, and franchise laws.

The investigation comes in response to a petition from Brazil's General Workers' Union (UGT), which asked the country's Public Prosecution Service to open a civil inquiry into allegations of tax dodging, unfair competition, and labor infringements. The complaint alleged McDonald's has organized its business in Brazil in a way that allows it to avoid taxes, skirt compliance with local franchise laws, and engage in anti-competitive behavior that disadvantages competitors and consumers alike.

Furthermore, the New York Times reports, the inquiry will look into whether Arcos Dorados "paid bribes to government officials in return for favors from Brazil’s tax collection regulator."

The news comes on the heels of an "unprecedented" hearing last summer, during which workers from five continents, elected officials, and international labor leaders gathered in Brasília to testify before the Brazilian Federal Senate on how McDonald's is "driving a global race to the bottom."

There's something in the air...

And it represents a new salvo of an international campaign. As USA Today notes, the push by UGT "is part of a larger 'Fight for $15' campaign backed by the Service Employees International Union in the United States. As part of its strategy to push for raising the minimum wage for fast food workers in the U.S. to $15 per hour, SEIU has sought to shine the spotlight on McDonald's business practices around the globe."

Indeed, in a Facebook post on Friday, Fight for 15 said the inquiry in Brazil was further evidence that "McDonald's anti-worker policies are being called out worldwide."

Earlier this year, three Italian consumer organizations filed a complaint with the European Commission, demanding that body launch an anti-trust investigation into the burger behemoth. The groups charge that the multinational food company "abuses its dominant fast-food market position in Europe, restricting consumer choice and leading to higher prices and poorer quality of service and food," according to a summary of the complaint by Fight for $15.

Yet another Commission investigation is looking into whether McDonald's is unfairly dodging taxes in Luxembourg.

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