The Federal Trade Commission is reportedly investigating Juul Labs, the e-cigarette startup, over its marketing practices, according to a report in The Wall Street Journal. The government agency is particularly interested in whether Juul used deceptive marketing that targeted minors. It’s also looking into Juul’s hiring of influencers to sell its products. The FTC might seek monetary damages.
In a statement to the Journal, Juul said it used influencers in a “small, short-lived pilot” that ended last year. The company paid less than $10,000 to fewer than 10 adults over the age of 30 who were current or former smokers, the spokesperson told the paper.
The investigation apparently has been in the works since last year, even before tobacco conglomerate Altria Group invested more than $12 billion to take a 35 percent stake in the startup. The first FTC letter requesting marketing information was sent to Juul in September. News of this investigation joins prior reports that the Food and Drug Administration along with several state attorneys general are also investigating Juul’s marketing practices. The FDA asked Juul to turn over information that could explain why the devices are popular with young people, and then it inspected the company’s office looking for related documents.
Meanwhile, in an interview today, Juul Labs CEO Kevin Burns warned nonsmokers to never use its company’s products. “Don’t vape,” Burns said in an interview on CBS This Morning. “Don’t use Juul.” He went on to say the product isn’t designed for people who don’t already have a “preexisting relationship” with nicotine.
The US Surgeon General declared youth vaping an epidemic in 2018 and specifically noted the popularity of Juul in his advisory. A study published earlier this year found that people who started vaping in their teens were more likely to smoke cigarettes later in life.
Juul is now working to backpedal out of the youth market that it says it never wanted in the first place. It’s created a Bluetooth-enabled e-cigarette that requires users to submit government-issued photo identification to use the product. It’s also pushing retailers to install an electronic age-verification system on their point-of-sale software. The company is willing to offer up to $100 million in incentives to get them to do so.