Who Handles Regulations in Internet Marketing? The FTC or State Attorney Generals?

As a speaker on the Search & Regulated Industries panel for Search Engine Strategies, I tend to keep and eye out for "legal" or "regulation" items of interest that could affect Search Marketers in their efforts to promote their clients businesses.  While reading through some of my blog subscriptions, I came across a piece about the state of Illinois suing the software company iMergent (IIG).

The Illinois State Attorney General, Lisa Madigan, is bringing the lawsuit because the Attorney General's office believes that two companies operated by iMergent operated in a fraudulent manor, by misleading "consumers with false promises to set up online stores".  iMergent has categorically denied the the state of Illinois' allegations.

There's a reason I bring this to your attention.  More and more frequently we are seeing the individual state's attorney generals going after websites and internet marketers that are practicing deceptive tactics, not the FTC.  Although the official governing body over trade and commerce (including what happens on the internet) in the United States is the FTC, the individual states are taking up the cause of their state residents who are defrauded.  However, it isn't like like the A.G.'s are consistently scanning the internet for websites and marketers to target, they don't act on these types of cases unless they get enough complaints from its state residents.

So if you are operating an unethical and fraudulent business on the internet and think the FTC is never going to come down on you because "your small" or you think the FTC is "backlogged" - you have to look over your other shoulder.  Why?  Because your state's Attorney General could be tapping on it very shortly, just take a look at what New York's Elliot Spitzer has been going after (subscription required to view article, but free to sign up!).