Currently those handling pan-European accounts act under the regulations of their country of origin, but MEPs have voted to remove the principle as part its review of the Services Directive.
Euro MPs voted 394 to 215 in favour of changes to the directive, which supporters say will open up cross-border competition.
However, FEDMA says such a move would lead to a confusing situation where direct marketing firms have to adhere to a raft of regulations across Europe.
Alastair Tempest, FEDMA director general, said: "For cross-border marketing, it is essential to have legal certainty. This vote threatens to reintroduce the old concept that you have to apply all the laws of all countries into which you market, which is a sure-fire invitation for countries to apply protectionist measures."
He added that the changes are not set to cover online direct marketing activity, which is protected by a separate E-commerce Directive dating back to 2000, and therefore create "two contradictory legal concepts for direct and interactive marketing".
The vote in the European Parliament is the first reading of changes to the Services Directive and still has to be considered by the European Commission and national governments.
It also has to return to the European Parliament for a second reading before any changes are adopted.
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