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While Juul quickly settled this lawsuit out of court, the thing is, this is the first in a string of lawsuits by 13 other states, including New York and California.
- On Monday June 28, it was announced that Juul Labs, Inc., had reached a settlement of US$40 million with the state of North Carolina.
- To give you an idea of how much Juul dominates the industry, the company makes up for about 63% of nicotine vaping sales in the United States.
Why was Juul sued?
- So, the company came under intense scrutiny for their marketing practices which were claimed to be aimed at young people which helped hook 5.4 million youth users in 2019.
- While Juul quickly settled this lawsuit out of court, the thing is, this is the first in a string of lawsuits by 13 other states, including New York and California.
- Meanwhile, the Food and Drug Administration (FDA) is still also trying to decide on whether to allow certain vaping products, like flavored tobacco, to stay on the market.
What did Juul agree to in this settlement?
- The lawsuit was brought by North Carolina Attorney General Josh Stein “for designing, marketing, and selling its e-cigarettes to attract young people and for misrepresenting the potency and danger of nicotine in its products.”
- The main punishment is the US$40 million, which will now be redirected toward programs that will research e-cigarettes, prevent addiction and help people quit e-cigarettes.
- “This settlement is consistent with our ongoing effort to reset our company and its relationship with our stakeholders,” Juul said in a statement, “as we continue to combat underage usage and advance the opportunity for harm reduction for adult smokers.”
- The settlement essentially lets Juul move on from this first lawsuit without claiming any responsibility for the teenage tobacco craze.
What could this settlement mean beyond Juul?
- Though Juul never said that they did anything wrong, there are a few implications to the settlement beyond just the US$40 million.
- In fact, the way Juul is allowed to create ads moving forward can have huge implications for the future of advertisement for the tobacco industry overall.
- In 2019, The House Committee on Oversight and Reform said that Juul’s original advertising method sought out the youth, using influencers and hashtags to get more eyes on their products.
- Though the company stopped posting on its own social media in 2018, the social media posts featuring “#Juul” just continued to rise.
- In fact, the rate of hashtags featuring Juul tripled after the company stopped posting.
- Now, one of the commitments Juul has made is to not use “social media advertising, influencer advertising, outdoor advertising near schools, and sponsoring sporting events and concerts.”
- Stein called the popularity of e-cigarette products an “epidemic of youth nicotine.”
- After the settlement, he wrote the FDA a letter “to urge [them] to act swiftly to take strong action to protect young people from harmful e-cigarette products.”
- Stein is not the only one pushing the FDA to make changes.
- On June 23, FDA Commissioner Dr. Janet Woodcock was asked by members of Congress if she intends on banning flavored e-cigarettes. “While I can’t predict the future, I think that might be likely,” she responded.
- The 13 other lawsuits are all similar; they all say that Juul knew or should have known they were advertising to youth under the legal smoking age.
- Needless to say, the last few years have been tough for the company. In 2020, the company reported an 85% loss of value since 2018. And, after a series of product bans, lawsuits and bad press, the company is struggling to stay afloat.
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