Vaporizer technology company Juul Labs agreed to pay $438.5 million in a settlement with 33 states over marketing practices that have been linked to a surge in teen vaping, said Connecticut Attorney General William Tong.
“It's more than a lesson and deterrent, it's a demonstration to the market that no matter how big you are … if you engage in illegal practices, targeting young people and marketing to them, and using product placements and influencers, we will stop you, and we will come after you,” Tong told Cheddar News.
The 33 states, which included New Jersey, Ohio, and Texas, joined together with Puerto Rico in 2020 to investigate Juul’s marketing. The investigation found that Juul, which began operations in 2015, targeted teens with launch parties, giveaways, and youthful models in social media ads. Teen vaping surged in the following years, prompting authorities to declare it an “epidemic.”
Under terms of the deal, Juul has agreed to restrictions on its marketing practices and will refrain from marketing to youth, including using cartoons or depicting anyone under 35 in ads. Juul will no longer be able to fund education programs, sell brand name merchandise or flavors not approved by the Food and Drug Administration and advertise on billboards, public transit or via paid influencers. It cannot offer free samples, advertise on social media unless using a testimonial from someone 35 or older, or in outlets unless the audience is verified as 85 percent or more adults. The deal also includes restrictions and guidelines on distribution in stores.
Tong called the deal’s terms “some of the strongest mandates in any settlement agreement in any case” in his experience as attorney general.
“I think this goes a long way to protecting kids and families in Connecticut,” he said.
Connecticut plans to use its portion of the funds for education in and outside of schools, as well as prevention and treatment. The settlement represents a win for a bipartisan coalition of lawmakers, but Tong was under no illusion that the lawsuit would actually solve the teen vaping problem altogether.
In 2021, 11.3 percent of high school students and 2.8 percent reported current e-cigarette use. Daily use was reported among 27.6 percent of high school e-cigarette users and 8.3 percent of middle school vape users, according to the Centers for Disease Control. Among young adults aged 19- to 30 years-old, past month vaping has surged to 16 percent in 2021 from 6 percent in 2017.
“Long term, we're gonna be dealing with the health ramifications of this epidemic in the same way that we're still dealing with the long term health effects of smoking,” Tong said.
The settlement puts one major threat to rest for Juul, but the embattled company isn’t out of the woods yet. It still faces scrutiny from the Food and Drug Administration, and lawsuits from nine other states and individuals alleging Juul got them addicted to its products.
Juul also isn’t the only vape player in the marketplace. Throughout the past few tumultuous years, the company has seen its market share tumble to about a third, down from 75 percent. There are still companies producing sweet and fruity vape products that might appeal to younger consumers, but Tong said other vape makers might think twice before taking a page out of Juul’s playbook.
“I am sure that every manufacturer of a vape product, every reseller understands that we are very serious about this. And we're going to go after anybody who targets young people and breaks the law in trying to sell these products to kids and to get them hooked,” he said.