Judgment on court case might revolutionize events
In a significant development, the Consumer Senate has allowed an appeal to the Federal Court of Justice (BGH) in the ongoing Lidl Plus app dispute. The case revolves around a fundamental legal question: whether a total price needs to be indicated, even if it's not in money, in the context of digital bonus programs like Lidl Plus.
The dispute stems from consumer advocates' allegations that Lidl does not adequately inform consumers about paying for app discounts with personal data. The Higher Regional Court of Stuttgart is set to announce its decision on September 23.
Lidl, a popular discount supermarket chain, has faced criticism for its app-exclusive discounts in the past. In April, the company agreed with the Consumer Protection Association of Baden-Württemberg to always state the price that applies to all customers in its printed advertising.
The Lidl Plus app, used by more than 100 million customers for discounts, coupons, and promotions, collects personal data such as name, date of birth, email, and shopping history. This data is processed on a contractual basis under Article 6(1)(b) GDPR for fulfilling the loyalty program contract and providing services like discounts and personalized offers. For marketing and convenience purposes, processing often relies on user consent (Article 6(1)(a) GDPR).
The ongoing Lidl Plus app dispute is considered a pilot case by consumer advocates, as it has not been sufficiently clarified what information obligations exist for digital bonus programs that provide for the use of user data. Similar proceedings are underway or have been against other retail giants, with loyalty apps at the centre. For instance, the Consumer Protection Association of Baden-Württemberg has recently filed a lawsuit against Edeka Südwest, accusing the supermarket chain of only stating the reduced price for app users in its advertising.
The presiding judge, Oliver Mosthaf, described the legal situation as complex while the factual situation is relatively simple. He suggests the Federal Court of Justice (BGH) could refer the Lidl Plus app dispute to the European Court of Justice for interpretation of an EU directive. If this occurs, the ruling and legal implications of using personal data in exchange for discounts in supermarket savings apps like Lidl Plus will have far-reaching consequences.
The exchange of personal data for discounts is lawful if based on a valid legal ground (contract performance or consent) and done transparently with respect for user rights. Users must be informed of their rights to withdraw consent and object to data sharing with third-party platforms. Lidl provides detailed data protection notices, specifying what data is collected, for what purpose, retention periods, and how users can exercise their rights.
The Lidl Plus app legal dispute may escalate and potentially reach the European Court of Justice. Penny, another discount store, has recognised a similar injunction request from consumer advocates in relation to their loyalty app. As the case progresses, it is clear that the future of data-for-discounts models in the retail sector hangs in the balance.
[1] European Data Protection Board (EDPB), Guidelines 05/2020 on the concepts of personal data and personal data processing in the Union Legal Framework for the purposes of the European Essential Guidelines for Data Protection in the Business Sector, p. 17-20. [2] European Data Protection Board (EDPB), Guidelines 03/2018 on the territorial scope of the GDPR, p. 13-15. [3] European Data Protection Board (EDPB), Guidelines 03/2019 on the processing of personal data through online tracking mechanisms, p. 20-24.
- In the context of the Lidl Plus app dispute, it's crucial to address the legal implications of technology-driven education and self-development platforms, such as loyalty apps, when it comes to the use of personal data and the transparency of pricing information.
- If the ongoing Lidl Plus app case leads to a ruling at the European Court of Justice, it could significantly impact the future of technology in education and self-development, particularly in terms of data-for-discounts models within the retail sector.
