TRIP REPORT

Held down the road from The Pentagon , and a quick drive from our nation ’ s capital , the day-and-a-half event explored numerous legal matters facing control states . Several themes emerged in 2024 . Among them : Challenges in our digital age , the post-Covid world and “ new year , same challenges .”

To the latter , attendees , as usual , heard much about tied house laws , antitrust issues , and continued consequences from the 2005 Supreme Court Granholm decision .

Concerning newer developments was the panel The Growing Frontier for Supplier Advertising : E-Commerce . A study shared during this discussion found that alcohol ecommerce had increased 131 % between 2019−2021 . Naturally , this spike was caused in no small part by Covid−19 lockdowns . But while alcohol ecommerce growth has since normalized , it remains robust . The same study forecasted that this market would reach $ 40 billion by 2027 .

Which raises questions for regulators . What constitutes legal and illegal marketing for alcohol brands ? What if brand advertisements lead you to make purchases through the digital storefronts of specific retailers ? How about when alcohol ads appear on unlicensed third-party websites ? Are these not tied house violations ?

“ What you can ’ t do in a brick-and-mortar store , you shouldn ’ t be able to do in a digital environment ,” said Steve Gross , VP state relations , The Wine Institute . “ All of this only works with robust enforcement from the state and federal level to promote a level playing field in the industry .” For instance , he added , “ We need to do a better job at defining digital slotting fees .” Others on the panel pointed out that regulating digital alcohol advertisements is tricky given the nature of digital marketing . Algorithms spit out different ads to different people on different websites based on different user profiles , pointed out Robert Budoff , assistant general counsel for the Distilled Spirits Council of

The United States .

He remained wary of overregulation in this area . “ This is a new type of commerce and it ’ s going to take off with or without us ,” Budoff said . “ It would not be a good thing if this ends up stifling competition . Our suppliers at DISCUS do not want to be left behind .”

Another new challenge in our digital era is the risk of class action lawsuits against owners of websites that collect consumer data . ( I . e .: All sites .) For instance , plaintiff lawyers have come after websites that record chatbox conversations with users without explicitly saying so upfront . Demanding hefty payouts , these lawyers claim that this breaks U . S . wiretapping laws , with a third party in the middle receiving / handling user info without the user ’ s prior knowledge or consent .

Similarly , plaintiff lawyers now also claim that sites with features like Meta ’ s Pixel — which record users ' video history — violate Video Privacy Protection Act ( VPPA ). This is a 1980s law meant to protect people ’ s rental history at Blockbuster and similar stores . Blockbuster may be history , but VPPA violations are back and costing some companies $ 2,500 per user violation , in addition to costs and attorneys ’ fees .

These lawsuits were discussed in the

NABCA President and CEO , Neal Insley .

8 StateWays • Summer 2024 www . stateways . com