Disgraceful tobacco manufacturer Juul agreed to pay $438.5 million to 33 states and Puerto Rico to settle an investigation into whether vaping giant that markets its products deceptively and purposefully targets children and young people who most susceptible to nicotine addiction.
Mammoth settlement comes as the company moves on fight to survive with US Food and Drug Administration. In June, the FDA made the drastic move of denying marketing authorization for all Juul products, effectively force tobacco manufacturers out of the US market. However, Juul quickly gained administrative control, and the FDA announced in July that it would Review Juul’s products. In the meantime, the company is allowed to continue selling its products, but its ultimate fate remains uncertain.
The legal settlement and regulatory uncertainty is the latest consequence of Juul’s alleged role in fueling a nationwide vaping “pandemic”, which culminated in 2019. Juul became famous for appealing to children and teenagers as vaping among middle and high school students skyrocketed.
According to the 2020 Massachusetts attorney general’s lawsuit, Juul began marketing campaigns in 2015 and 2016 that relied on teen social media influencers and “stylish” models. The company even bought banners and videos advertising on sites like Cartoon Network and Nickelodeon’s Nick.com and Nickjr.com, the lawsuit said.
In May 2019, a study published in JAMA Pediatrics estimated that in 2018, 45% of Juul’s Twitter followers were between the ages of 13 and 17. In a congressional hearing in July 2019a high school student in New York City and his mother testified that in 2017, a Juul staff member giving a live presentation at a youth school without the presence of a teacher, the knowledge of the school administrator, or parental consent. During the presentation, Juul’s rep allegedly said that Juul’s e-cigarettes were “absolutely safe” and called Juul’s device the “iPhone of vapes.”
As previously reported by Ars, Juul’s dollar sales grew 783% from 2017 to 2018, reaching $942.6 million, according to a Wells Fargo analysis of Nielsen data at the time. there. Meanwhile, the proportion of high school students reporting tobacco use recently increased from 0.6 percent in 2011 to 10.5% in 2019, according to the Centers for Disease Control and Prevention. And within that time frame, tobacco use among high school students increased from 1.5% to 27.5%. Those numbers since then decline.
Amid growing alarm about teen vaping, the backlash against Juul has been swift. By the end of 2019, Juul has overthrow its chief executivepaused US ads and stopped some sales youth-friendly taste, including Mango, Fruit, Creme (or crème brûlée) and Cucumber. But the lawsuits increased, its regulatory troubles and market share began to decline. Last year, Juul agreed to pay the state of North Carolina $40 million claims that it targets young people. In June this year, tobacco giant Altria – formerly known as Philip Morris Company – said its 35% stake in Juul, which it bought in 2018 for $12.8 billion, currently valued at just $450 million. Even with this week’s big payout, Juul still faces some significant legal challenges.
In statement on September 6, Juul wrote:
This settlement with 34 states and territories is an important part of our ongoing commitment to addressing past issues. The terms of the agreement align with our current business practices that we started doing after a company-wide reset in Fall 2019. With today’s announcement, we’ve settled. with 37 states and Puerto Rico, and appreciated the Attorney General’s efforts to deploy resources to combat the use of minors.
In addition to the payment, which will be split between states and used in a variety of ways to tackle youth addiction, the settlement also prohibits Juul from engaging in certain activities, such as marketing products. for young people, depicting people under the age of 35 in any marketing, using cartoons, using paid social media influencers, or advertising in stores with an audience less than 85% are adults.
In a statement announcing the settlement, Connecticut Attorney General William Tong celebrate the deal while blowing up Juul.
“Juul’s well-thought-out advertising campaigns have spawned a new generation of nicotine addicts. They relentlessly market vaping products to underage people, manipulate their chemistry to create palatability for inexperienced users, use age-verification processes that do not adequately and mislead consumers about the nicotine content and addictive potential of their products. Mr. Tong said. “Through this settlement, we have secured hundreds of millions of dollars to help reduce nicotine use and forced JUUL to accept a series of strict orders to end youth marketing and cracking down on underage sales.”
This story originally appeared on Ars Technica.