Lidl made commitments to boost competition and reduce prices as a result of the GVH’s proceedings

In the summer of 2024, the Hungarian Competition Authority (GVH) initiated competition supervision proceedings against Lidl Magyarország Kereskedelmi Bt. (Lidl), as it suspected that the company was gaining market leadership with its slogan and communication of “Lidl: the champion of low prices” made claims that could have deceived consumers.

The GVH investigated the facts in detail, requested data from Lidl on several occasions, and held numerous consultations with the company. During the proceedings, the national competition authority revealed that Lidl had developed a detailed measurement methodology and internal regulations when developing its commercial practices, in which process it also involved external experts with the aim of ensuring compliance with the law.

To determine the main message of the campaign, namely “the champion of low prices”, it took as its basis the average monthly prices of the daily product basket of 62 product categories in the Price Watch – available at the time of the exercise. In addition, in the interest of soundness, the company took several precautionary steps, including not taking into account, when compiling the daily product basket, those products that were not available that day at all six retail chains that provided data to the Price Monitor, and when calculating the monthly average, it did not take into account days affected by holidays and technical errors.

During the procedure, the company offered a commitment to the Competition Council, with the aim of ensuring even more solid compliance with the rules in the future. In this context, Lidl will, among other things, clearly display the reference to the Price Monitor in all cases, and will also supplement its methodology regarding the cheaperness of monthly average baskets with two conditions:

1. it will only apply its monthly price leadership claims if it is 2.5% cheaper than the average basket value of the second cheapest chain participating in the comparison,
2. it will only apply its price leadership claims for the entire month if it was the cheapest on at least one more day than the second chain participating in the comparison.

The retail chain will present its new regulations and compliance requirements corresponding to the amendments to its employees in the framework of internal training courses and will also incorporate control based on an external competition law expert into its communications.

The GVH Competition Council According to its assessment, the commitments may be suitable to eliminate potential infringements and ensure future compliance, and in addition – thanks to the 2.5% and daily frequency rules – they will stimulate competition and, through this, may have a price-reducing effect, which is clearly beneficial for consumers.

In view of these, the Competition Council – without establishing an infringement or its absence – closed the proceedings and made it mandatory for Lidl to implement the commitments. The commitments can also enhance the price-reducing effects of the Price Monitoring System by popularizing it, which further increases the consumer and social benefits resulting from the procedure.