The Federal Commerce Fee is suing to unwind Altria’s $12.8 billion investment in Juul Labs, alleging that the 2 firms labored collectively to eradicate competitors within the e-cigarette market.
In its criticism, the FTC stated that Juul’s e-cigarette merchandise posed a big menace to Altria’s market dominance. Juul had been a competitor to Altria’s personal e-cigarette choices. However in 2018, Altria stopped making e-cigarettes and as a substitute grew to become Juul’s largest investor. “Altria and Juul turned from opponents to collaborators by eliminating competitors and sharing in Juul’s income,” stated Ian Conner, director of the Bureau of Competitors, in a press release. Altria used its leverage as a high tobacco firm to safe favorable shelf house for Juul’s merchandise in shops throughout the USA, the FTC alleged.
This relationship helped Juul develop into the highest e-cigarette model within the nation, in accordance with the fee.
Juul didn’t instantly reply to a request for remark.
Final August, The Wall Avenue Journal reported that the FTC was investigating Juul over its advertising and marketing practices, together with the way it marketed its merchandise to minors over social media. Final October, Altria confirmed that it was also under investigation by the commission over its relationship with Juul. On the time, Juul had simply ousted its embattled CEO, Kevin Burns, and changed him with a former longtime Altria government.