Fri. Nov 22nd, 2019

FTC is investigating e-cigarette maker Juul over targeting young people: WSJ

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The Federal Trade Commission is investigating the marketing practices of Juul Labs Inc. to determine whether the company targeted minors, the Wall Street Journal reported Thursday, citing people familiar with the matter. Juul is a maker of e-cigarettes that has come under scrutiny from the U.S. Food and Drug Administration after a spike in teenage smoking that was partly blamed on some of the flavors Juul offers, such as creme brulee, cucumber and mint, that appeal to young people. The company, in which Altria Inc. owns a 35% stake, is also the subject of a number of lawsuits, including a recent one that alleges that it violated the Racketeer Influenced and Corrupt Organizations Act, known as RICO, that the Justice Department used to sue the tobacco industry in the late 1990s. The FTC is looking at whether the company used deceptive marketing or used influencers to target young people on social media. The company said it is fully cooperating with the agency. Altria and the FTC declined to comment. Altria shares fell 2% on the news and are down 9% in 2019, while the S&P 500

SPX, +1.34%

has gained 16%. Philip Morris was down 1.9%. Altria and Philip Morris said earlier this week they are in merger talks, that if successful would reunite them after more than a decade apart. That deal is partly based on expected opportunities and risks associated with Juul.

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