Juul will also be obliged to create a “secret shopper” program to check whether retailers are complying with age and product limit restrictions.
E-cigarette manufacturer Juul has agreed to pay $22.5 million to settle a deceptive marketing and false advertising lawsuit filed by Washington Attorney General Bob Ferguson.
According to The Seattle Times, Ferguson said after the settlement that Juul Labs’ conduct harmed residents of the Pacific state.
“Juul’s conduct harmed Washingtonians,” Ferguson said. “They harmed the youth of our state. The company fueled a staggering rise in vaping among teens. Juul’s conduct reserved decades of progress fighting nicotine addiction, and today’s order compels Juul to surrender tens of millions of dollars in profit and clean up its act by implementing a state of corporate reforms that will keep Juul’s products out of the hands of young Washingtonians.”
“Juul violated the law,” Ferguson said, “[and] they did it over and over again.”
However, the terms of the agreement allow Juul to maintain it did nothing wrong. A spokesperson for the company said that it only settled “for the purposes of compromising” and to avoid further or protracted litigation.
The settlement, though, will oblige Juul to immediately cease any advertising which appeals to young consumers; this includes most of its social media marketing campaigns, with few exceptions. Juul will, for instance, be allowed to continue airing ads on Twitter, YouTube, and LinkedIn, but only if they feature adults who were habitual smokers before switching to electronic cigarettes.
Juul will also design and conduct a so-called “secret shopper” program in Washington.
As part of the program, Juul will send covert employees or contractors to check whether retailers are complying with age and product limits.
The “secret shoppers” will have to perform at least 25 checks per month for two years, with the results returned to the Washington Office of the Attorney General.
Austin Finan, a Juul representative, told The Seattle Times that the company’s leadership has a vested interest in combating youth abuse of e-cigarettes.
“This settlement is another step in our ongoing effort to reset our company and resolve issues from the past,” Finan said. “The terms of the settlement are consistent with our business practice sand past agreements to help combat underage use while offering adult smokers access to our products as they transition away from combustible cigarettes.”
The Seattle Times notes that Ferguson’s lawsuit alleged that, beginning in July 2015, Juul used a “social media campaign” featuring young models, bright colors, and “concepts of being ‘cool,’ ‘smooth,’ and ‘hip.’”
Juul, for instance, released purportedly “youth friendly flavors” in its starter packs, including “cool mint, fruit medley, and crème brûlée.”
Ferguson claimed that Juul “knew that these flavors were the most popular with underage consumers.”
After several years of marketing, e-cigarette use among minors registered an almost unprecedented rise: by 2019, more than 20% of high school sophomores reported using e-cigarettes in the past 30 days.
Juul, adds the Seattle Times, held at least 70% of the vape market in 2019.
While Juul has long maintained that its sole focus is adults who wish to shift away from combustible cigarettes, Ferguson said that existing scientific literature does not demonstrate that e-cigarettes are particularly effective at reducing nicotine or tobacco dependency.
“The existing evidence is insufficient to demonstrate JUUL products are effective to quit smoking,” Ferguson wrote in the lawsuit. “By contrast, the opposite concern is very real: that people (especially youth) begin using e-cigarettes and transition to traditional cigarettes.”