Juul To Pay $438 Million To Settle Probe Into Underage Marketing Scheme

Topline

Electronic cigarette giant Juul Labs agreed to pay $438.5 million on Tuesday to settle a lawsuit brought by 33 states and Puerto Rico, ending a two-year investigation into claims the company marketed its nicotine products to teenagers.

Key Facts

Juul must also comply with “strict injunctive terms severely limiting their marketing and sales practices,” according to a press release from Connecticut Attorney General William Tong, who led the investigation along with Texas Attorney General Ken Paxton and Oregon Attorney General Ellen Rosenblum.

The investigation found Juul marketed its nicotine products with launch parties, product giveaways, ads and social media posts.

In a statement to Forbes, a company spokesperson called the settlement a “significant part of our ongoing commitment to resolve issues from the past,” and that it is committed to “combating underage use.”

According to Tong, Juul “relentlessly marketed vaping products to underage youth, manipulated their chemical composition to be palatable to inexperienced users, employed an inadequate age verification process and misled consumers about the nicotine content and addictiveness of its products.”

The settlement money will be allocated towards nationwide programs aimed at reducing tobacco use, Tong stated.

The settlement comes nearly three months after the Food and Drug Administration banned Juul vaporizers from the market over claims it did not meet the administration’s standards, which Juul appealed and the FDA suspended; the company is still awaiting a further decision.

Key Background

Massachusetts became the first state to file a lawsuit against Juul in July 2018, alleging the company illegally advertised and sold nicotine products to minors and “created an epidemic of nicotine addiction among young people.” Juul denied having deliberately marketed nicotine to teenagers, adding its advertisements were aimed at helping adults switch from cigarettes to vaporizers, the New York Times reported, following accusations the company purchased ad space on Nickelodeon, Cartoon Network and Seventeen Magazine. In December 2019, former President Donald Trump signed into law legislation raising the federal minimum age to purchase tobacco products from 18 to 21.

Further Reading

Juul to Pay $438.5 Million to Settle Probe Over Underage Use (Wall Street Journal)

Juul to Pay Nearly $440M to Settle States' Teen Vaping Probe (NBC Washington)

Three In Five Americans Support Stricter Vaping Laws, Poll Finds (Forbes)