The Federation of German Consumer Organisations (VZBV) has filed a case against Lidl, claiming that its Lidl Plus app breaches customer privacy.
The VZBV has filed a case against Lidl in the high court in Baden-Württemberg. The federation claims that the German supermarket’s “Lidl Plus” app does not sufficiently inform customers that they are “paying” for discounts offered in the app by offering up their personal data.
“Whoever uses the Lidl Plus app receives exclusive discounts. But these discounts are only offered in exchange for personal data,” VZBV representative Rosamarie Rodden wrote in a press release.
The VZBV claims that Lidl does not sufficiently clarify this trade-off to customers in the app’s terms of use. According to the organisation, Lidl’s current policy is a “pilot procedure” since the law has yet to clarify which information obligations exist for bonus programmes that offer discounts in exchange for customers’ data.
According to the Lidl Plus privacy policy, if you download the Lidl Plus app, the company will collect and store your IP and MAC addresses, which branches of the supermarket you’ve visited, which products you bought, which type of products, the amount of each product, the price, any coupons or Pfandbons you used, the total amount you purchased, the time of your purchase and what payment method you used.
The supermarket chain also records your “regular shop”, your behaviour in the app, how regularly you use the app, which coupons you look at and what you click on in the app. This information is stored as long as a user is active on the app, and should they delete their account, for 24 months following.
All of this information is valuable to Lidl - or any shop which uses a similar bonus scheme - because it allows the company to build a character profile of you and create personalised discounts, making you more likely to go to and spend money in the shop.
How does this work in practice? Speaking to Tagesspiegel, State Commissioner for Data Protection and Freedom of Information in Baden-Württemberg, Stefan Brink, explained that geolocation tools are particularly effective at sending people to the shop.
“These allow Lidl to know whether you are on the sofa or already in the supermarket. [...] To get you off the sofa, Lidl will send you completely different offers than if you are already in the shop”.
For example, if Lidl knows that you buy Pringles every Friday evening, then it would be highly effective for the app to send you a discount for Lidl’s own-brand Pringles at this specific time, to get you into the shop and spending money.
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