Marketing firm sues competitor, alleging unfair business practices

St. Petersburg-based Catalina Marketing Corp. has sued Quotient Technology Corp., a competitor that’s based in Mountain View, Calif., but does a significant amount of business in Florida with clients such as CVS and Southeastern Grocers Inc., the parent company of Winn-Dixie.

The suit alleges that Quotient, which operates the website Coupons.com, engaged in unfair competitive practices by offering illegal, below-cost pricing and sending “misleading communications” to makers of consumer packaged goods in Florida and specifically Pinellas County.

Catalina’s complaint, filed in Pinellas County Circuit Court, stated that Quotient told CPG brands that they “were required to divert their business away from Catalina when in fact it was neither necessary nor in their interest to do so. The resulting disruption in service caused injury in Florida — not only to Catalina but to the Florida CPG brands and retailers, as well as consumers in Florida who benefited from Catalina’s highly targeted and effective in-store marketing services.”

Catalina spokesman Wally Petersen, in an email to the Catalyst, said Catalina declined to comment on the lawsuit and instead will “let the complaint speak for itself.” A phone call and email to Quotient’s public relations office were not immediately returned, and the case record does not identify the company’s legal representation. Catalina has retained the services of Edward Soto of Miami-based law firm Weil Gotshal & Manges LLP.

Catalina’s business is based on collection and analysis of shopping data that, according to the lawsuit, allows it to “design and execute marketing campaigns for its retail partners.” Such campaigns include coupons and other discounts that incentivize shoppers to buy products from leading CPG brands that partner with Catalina. Coupons are delivered to shoppers via in-store printers; Catalina, in the complaint, said this method results in higher redemption rates than Quotient’s coupons, which are printed at the end of a transaction receipt.

“As Catalina makes clear in the suit,” Petersen wrote, “Quotient’s below-cost pricing and unfair competition practices not only hurts Catalina, but also consumers, retailers and CPG companies; they all gain significant value from Catalina’s printed coupons.”

Catalina’s specific allegations concern a December 2018 attempt by Quotient to win the business of grocery store chain Albertsons, a Catalina client at the time.

“Quotient sought to gain in-store print coupon business by unfairly obtaining Albertsons’ business,” the complaint states, “and then leveraging that position unfairly (again) to obtain business with additional retailers and CPG brands.” Catalina alleges that Quotient landed the Albertsons account by offering below-cost, “predatory” pricing and thus caused harm to Catalina.

The complaint alleges that Quotient then leveraged its position with Albertsons to pressure the grocer’s CPG clients to transition their business from Catalina to Quotient, as of the second quarter of 2019.

“These communications were misleading,” Catalina stated in the lawsuit, “because Catalina’s contracts with its CPG customers were not specifically tied to Albertsons’ business. Moreover, Quotient was unable to provide in-store marketing services across Albertsons’ locations for most of 2019.”

Catalina believes Quotient’s outreach misled and sowed confusion among its clients, resulting in economic harm because clients were hesitant to spend additional marketing dollars on Catalina marketing programs in 2019.

“As a result of Quotient’s predatory pricing and misleading communications,” the complaint reads, “Catalina was no longer able to provide its in-store marketing services in Albertsons stores and lost business from CPG brands, and Catalina was harmed through lost sales revenue and other business opportunities.”

Catalina’s lawsuit asks the court for a jury trial and seeks damages in excess of $100,000.

This story will be updated if and when Quotient responds to the Catalyst’s requests for comment.