LEGO changes its discount system - Fairer conditions for online sales

The toys manufacturer LEGO has undertaken to operate its discount system in future in such a way that online retailers will be able to obtain the same level of discount as brick-and-mortar retailers. LEGO will introduce alternative or additional discount criteria for online sales which will be adapted to the particular features of this form of distribution. The Bundeskartellamt had reacted to complaints by retailers and initiated a proceeding. The authority has now been able to terminate the proceedings thanks to LEGO's cooperation.

Andreas Mundt, President of the Bundeskartellamt: "A manufacturer can naturally set quality standards for the distribution of its products and also grant its retailers different levels of discount for different services.  However, it may not put the online sales distribution channel at a structural disadvantage. Many retailers now also operate a dual-distribution system and sell online in addition to offline in order to gain new customers.  Such business models must be made possible, in some cases also to protect brick-and-mortar distribution. It is crucial for the consumer that competition can develop on all the distribution channels."

The level of discount which LEGO grants is of key importance for the retailers' purchase price. According to LEGO's previous discount system retailers could only obtain the highest number of discount points through sales in offline stores because several criteria applied exclusively to the brick-and-mortar trade, e.g. number of metres of available shelf space. This meant that even retailers which fulfilled LEGO's conditions in online sales in many cases obtained lower discounts than those which were exclusively active in offline sales. The company is to stop this discrimination between sales channels. LEGO will inform the retailers separately about the amendment to its discount system.

Information on similar cases: Bosch Siemens Hausgeräte (see press release of 23 December 2013), GARDENA (see press release of 28 November 2013) and Dornbracht (see case summary of 13. Dezember 2011 [in German]).