U.S. Federal Trade Commission drops lawsuit against Altria Group and JUUL

The U.S. Federal Trade Commission (FTC) has recently dropped its lawsuit against Altria Group and JUUL. The case involved Altria Group’s 2018 investment in JUUL.

Altria Group and JUUL were once competitors in the vaping market. At the end of 2018, Altria Group acquired a 35% stake in JUUL for US$12.8 billion. The two sides entered into a non-compete agreement and shifted from competitors to collaborators by sharing profits. In 2020, the FTC said the move violated antitrust law and filed suit against Altria Group and JUUL.

Several investigations and lawsuits concerning JUUL’s marketing practices caused the value of Altria Group’s investment in JUUL to shrink significantly. On June 23, 2022, the U.S. Food and Drug Administration (FDA) issued a marketing denial order (MDO) to JUUL, requiring U.S. stores to remove its vaping devices from shelves on the grounds that there was insufficient data and evidence to show the products were “appropriate for the protection of public health.” JUUL subsequently appealed, and the FDA agreed to re-examine the company’s premarket tobacco product applications.

In early September 2022, JUUL agreed to pay nearly US$440 million to settle an investigation by 33 U.S. states into the marketing of its vaping products. Critics accused JUUL’s marketing practices of driving a sharp increase in underage vaping.

At present, Altria Group has announced the termination of its non-compete agreement with JUUL and has converted its entire investment in JUUL into a global license for JUUL’s intellectual property related to heated tobacco cigarettes. (Translated by Li Heng from Reuters)