JUUL Labs, an electronic cigarette company, will pay Ohio, along with over 30 other states and the U.S. territory of Puerto Rico, a $438.5 million settlement following a lawsuit involving what the Ohio Attorney General’s Office described as JUUL’s “misguided” marketing and sales practices.
“No nicotine marketing to kids!” Attorney General Dave Yost said in a news release on Tuesday. “It was wrong when it was Joe Camel, and it’s wrong when it’s JUUL’s ‘Miint’ and ‘Fruut’ flavors and their influencer-led targeting. This settlement puts an end to JUUL’s trawling for new addicts among our children.”
The Ohio Attorney General’s Office said JUUL was “willfully” appealing to underage users through its marketing and advertising.
An investigation led by the states of Connecticut, Texas and Oregon claimed JUUL targeted underage users with launch parties, social media influencers, and free samples. According to the Ohio Attorney General’s Office, a study of the company’s Twitter account found that 45% of its followers were ages 13 to 17; only 20% were 21 or older.
The investigation also found JUUL sold e-cigarettes in “youth-friendly flavors” like Miint, Fruut, Bruule, Tobaac, Cool Cucumber, Coco Mint and Mango. The Ohio Attorney General’s Office also stated in a news release that JUUL made the chemical composition of its product to be less harsh on young and inexperienced users. They also stated JUUL had falsely claimed to contain less nicotine than what it actually does, noting JUUL contains more nicotine than more other e-cigarettes, and JUUL also suggested it was a smoking-cessation device when JUUL did not have authorization from the Food and Drug Administration to make that claim.
As part of the settlement, JUUL will also have to make marketing changes and limit sales practices. JUUL has agreed to refrain from doing the following actions:
- Market to youths.
- Depict anyone under age 35 in any marketing.
- Use cartoons in its marketing.
- Pay for product placement.
- Sell brand-name merchandise.
- Sell flavors not approved by the FDA.
- Allow access to websites without age verification on a landing page.
- Make representations about nicotine not approved by the FDA.
- Make misleading representations about nicotine content.
- Participate in sponsorships or naming-rights deals.
- Advertise in outlets unless 85% of the audience is adult.
- Advertise on billboards, public transportation and in social-media (other than testimonials on social-media by individuals over the age of 35, with no health claims).
- Use paid influencers.
- Use direct-to-consumer ads unless age-verified.
- Offer free samples.
JUUL ended its social media marketing, and it now only sells pods in two flavors, tobacco and menthol.
It is currently unclear how much of the settlement Ohio will receive, as well as what the funds might be used for or if any local municipalities will receive funds from the settlement. A representative of the Ohio Attorney General’s Office said the states involved in the lawsuit are finalizing and executing the settlement, which could take three to four weeks.
The proposed $438.5 million would be paid out over a period of six to 10 years, with the amounts paid increasing the longer the company takes to make the payments. If JUUL extends the payment period to 10 years, the final settlement could increase up to $476.6 million.
Unrelated to this settlement, the FDA on June 23 ordered JUUL to stop selling its products in the United States. Following an appeal by JUUL, however, the FDA has since decided to let JUUL’s products stay on the market temporarily while the agency conducts an additional review.
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