Landmark deal: Juul Labs to pay $440 million to end investigation into its marketing

Landmark deal: Juul Labs to pay $440 million to end investigation into its marketing

E-cigarette maker Juul Labs has agreed to pay nearly $440 million to end a two-year investigation by 33 states into the marketing of its high-nicotine vaping products. These products have been widely blamed for causing a national increase in vaping among teens.

Connecticut Attorney General William Tong announced the agreement Tuesday on behalf of the states and Puerto Rico, which joined together in 2020 to review Juul's early promotions and claims about the safety and benefits of its technology as an alternative to smoking.

The settlement ends one of the biggest legal threats facing the company, which still faces nine separate lawsuits from other states. Additionally, Juul faces hundreds of personal lawsuits filed on behalf of teens and others who say they became addicted to the company's vaping products.

The states' investigation found that Juul targeted underage teens with launch parties, free product giveaways, advertisements and social media posts using youthful models, according to a release.

“Through this settlement, we secured hundreds of millions of dollars to help reduce nicotine use and forced Juul to agree to a series of strict terms to end marketing to youth and crack down on sales to minors.” , Tong said in a press release.

The $438,5 million will be paid over a period of six to ten years. Tong said Connecticut's payment, of at least $16 million, will go toward vaping prevention and education efforts. Juul had previously settled lawsuits in Arizona, Louisiana, North Carolina and Washington.

Removal of fruity and sweet flavors

Most of the restrictions imposed by Tuesday's settlement will not affect the current practices of Juul, which had stopped using parties, free giveaways and other promotions after being placed under surveillance several years ago.

Teen use of e-cigarettes skyrocketed after the launch of Juul in 2015, prompting the U.S. Food and Drug Administration (FDA) to declare an “epidemic” of vaping among teens. Health experts have warned that this unprecedented increase risks hooking a generation of young people to nicotine.

But since 2019, Juul has mostly gone backwards, dropping all advertising in the United States and removing its fruity and sweet flavors from store shelves.

The biggest blow came earlier this summer when the FDA decided to ban all Juul vaping products from the market. Juul challenged the decision in court, and the FDA has since reopened its scientific review of the company's technology.

This FDA review is part of an overall effort by regulators to monitor the multibillion-dollar vaping industry after years of regulatory delays. The agency has authorized a handful of e-cigarettes for adult smokers seeking a less harmful alternative.

A revised marketing strategy

While Juul's initial marketing targeted young, urban consumers, the company has since shifted to promoting its product as an alternative nicotine source for older smokers.

“We remain focused on our future as we fulfill our mission to transition adult smokers from cigarettes – the leading cause of preventable death – to vaping while combatting underage use,” the company said in a statement.

Juul agreed to refrain from many marketing practices as part of the settlement. This includes not using cartoons, not paying influencers on social media, not showing people under 35, not advertising on billboards and public transport and not to place advertisements in media whose audience is not 85% adults.

The agreement also includes restrictions on where Juul products can be placed in stores, age verification for all sales, and limits on online and retail sales.

Juul initially sold its high-nicotine pods in flavors like mango, mint, and cream. These products have become a scourge in American high schools, with students vaping in bathrooms and hallways between classes.

However, recent federal data shows that teens are increasingly turning away from the business. Most teens now prefer disposable e-cigarettes, some of which continue to be sold with sweet and fruity flavors.

Overall, the survey showed a nearly 40% drop in vaping rates among teens, with many forced to learn remotely during the pandemic. Still, federal officials cautioned against interpreting these results because they were collected online for the first time, instead of collected in the classroom.

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About the Author

Editor-in-chief of Vapoteurs.net, the reference site for vaping news. Engaged in the world of vaping since 2014, I work every day to ensure that all vapers and smokers are informed.