• States May Target Marketers in Downturn
  • May 8, 2008
  • Law Firm: Manatt, Phelps & Phillips, LLP - Los Angeles Office
  • As states seek to restore tax revenue lost in a downturn or recession, they may turn their regulatory sights on marketers, getting more assertive about enforcing laws governing misleading advertising and other areas.

    According to lawyers speaking at the Promotional Marketing Association’s 2008 Integrated Marketing Conference on April 8, state agencies historically look to close budget gaps in part by issuing fines to marketers and other businesses who violate state regulations.

    Speaking at the conference, Manatt partner William Heberer said that 2008 has witnessed an increase in the rate of state enforcement actions from previous years. “Our office has definitely seen a spike in state activity in the last few months across many marketing areas: telemarketing, a lot of online marketing, marketing to children, some pure disclosure cases. They’re bringing more cases than I’ve seen in the last three to four years,” Heberer said.

    Two areas in particular that may experience closer regulatory scrutiny are green marketing and campaigns directed at particular ethnic groups, lawyers said. “I can’t say I’ve seen a case around that yet, but I can foresee seeing a case,” Heberer said. “If you engage in a telemarketing campaign to Hispanics or some kind of e-mail offer, but then your Web site or your online loyalty program are only in English, then that person can’t enjoy the full use and benefit of a product that was sold to them in Spanish but provided to them in English.”

    Green marketing may also be subject to more intense examination, since it is a new, rapidly growing area in which marketers will be swimming in relatively untested waters. The Federal Trade Commission is currently contemplating revising its decade-old “green guides” for marketers and is actively seeking enforcement actions to help it establish its authority in this expanding area, lawyers remarked.