European sporting goods retailers and suppliers are teaming up to take an active part in the decision-making process around the European Union's digital single market project, which is taking shape this year and could have far-reaching repercussions on distribution strategies in the European sporting goods market.
Fesi, the federation of the European sporting goods industry, has formed a Digital Working Group, which got started in September and is chaired by Antoni Garcia, Nike's director for government affairs in the European Union. It comprises a dozen members, consisting of individual groups as well as national associations and the European Outdoor Group (EOG).
It's an understatement that the European Commission is taking this digital single market seriously: The Commission chaired by Jean-Claude Juncker picked this topic as its second-highest priority when it was appointed in 2014, coming after his concerns about economic growth and employment.
Fesi's digital working group has responded to two consultations on this issue in the last few days. The first one related to geo-blocking, whereby suppliers may adjust their offer and pricing depending on the consumer's location. While the Commission appears to be generally hostile to geo-blocking, Fesi argues that varying national legislations on subjects such as VAT make it compelling to use some geo-blocking.
With regard to the second consultation, focusing on online marketplaces, Fesi supports moves to require more responsibility from these protagonists, particularly to combat online sales of counterfeit products. The association is pushing for regulatory changes at EU level to introduce a principle of duty of care for all online service providers, enabling disclosure of information, effective notice and takedown procedures, proactive and preventive measures, blocking infringers and effective measures against repeat infringers. On the other hand, the organization decided not to respond to a third consultation relating to VAT.
Fesi is also part of a coordination group that was formed between several trade associations to take advantage of potential synergies with other industrial sectors on this digital issue. The partners in this group include representatives of the toys, home appliances, cosmetics, food and drinks industries, as well as other interest groups focusing on direct marketing and digital trade.
Alberto Bichi, Fesi's secretary general, emphasizes that the European Commission's plans around the digital single market require active involvement from the sporting goods industry. He urges other companies to contact him, to support the newly established digital working group and to more efficiently influence the European agenda on this topic.
Another topical issue for the sporting goods industry in this digital area this month is a related sector inquiry that was launched by the European Commission's DG Competition last year, focusing on EU cross-border competition in online retailing. Several sporting goods retailers received a survey from the DG Competition around the middle of last year, and the Commission dispatched another detailed survey to brand owners a few weeks ago. The recipients include sporting goods companies, most of them selling apparel and footwear.
Jochen Schaefer, legal counsel for Fesi as well as the World Federation of the Sporting Goods Industry (WFSGI) and a lawyer in private practice, says that suppliers who received the survey have until Jan. 15 to respond and may be subjected to substantial fines in case their answers are incorrect or delayed without reason. Schaefer, who has been directly involved in the Deuter case described above, emphasizes that answers are not to be coordinated, but he adds that companies may seek individual advice on the matter. Deadline extensions of about two weeks are granted by DG Competition upon request.
Fesi predicts that it could take another year at least for the Commission to analyze all the information and to come up with an action plan. The importance of these issues has encouraged the federation to organize a meeting on Jan. 26 during Ispo Munich with Andrus Ansip, the European Commission's vice president for the digital single market. He is the special guest for this year's CEO meeting, the second edition of an event that brings together top executives from the European sporting goods industry. Due to shared interests in digital issues, the participants from the sports industry will be joined at the Fesi CEO meeting this year by executives from the wearable technologies sector.