Electronic Cigarette Juul Agrees to 45 Billion KRW Settlement in Lawsuit Over Youth-Targeted Promotions

Lawsuit Filed in North Carolina for Promotional Activities Targeting Minors
First Settlement Among Lawsuits Nationwide
FDA to Make Final Decision on Juul E-Cigarette Sales Approval This September

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] Juul, a leading American e-cigarette company, has agreed to pay a settlement of $40 million (approximately 45.2 billion KRW) in a lawsuit related to promotional activities targeting minors.

According to the Wall Street Journal (WSJ) on the 28th (local time), Juul agreed to pay a settlement amounting to $40 million in a lawsuit filed by the North Carolina Attorney General concerning promotional activities aimed at minors.

Previously, Juul was sued by North Carolina on charges of conducting various promotional activities to sell its e-cigarettes to minors and making false advertisements about the nicotine content in its products.

Juul has fully denied the allegations raised in the lawsuit, stating that it did not engage in advertising activities targeting minors. The company also emphasized that it will undertake various efforts to restore public trust.

According to the settlement, Juul will publicly disclose internal documents related to its advertising policies by July next year, and the settlement funds will be used for campaigns and research activities aimed at preventing e-cigarette use among youth.

Additionally, Juul will largely cease marketing activities on social networking services (SNS) and stop promotional activities near schools, as well as at concerts and sports events.

This lawsuit settlement came ahead of the U.S. Food and Drug Administration (FDA)'s decision this summer on whether to allow the sale of Juul products.

The New York Times (NYT) reported, "The FDA is expected to make a final decision on whether to allow product sales by September," and added, "It appears that Juul settled the lawsuit to avoid a jury trial, where the company was likely to lose, in the ongoing North Carolina lawsuit ahead of this decision."

There is also an interpretation that Juul decided that ending the lawsuits by paying the settlement was more advantageous, given that it faces hundreds of lawsuits filed against it.

A lawyer from the U.S. law firm Alston & Bird commented on the settlement amount Juul agreed to pay, saying, "This is a relatively small amount compared to the litigation costs Juul will have to continue paying in the future."

Juul has long faced criticism in American society for causing a sharp increase in e-cigarette use among minors.

In 2015, Juul's first advertising campaign, "Vaporized," focused on associating its brand with a young image of the 20s and 30s generation to establish a sophisticated brand image, which is analyzed to have also had an advertising effect on minors.

WSJ reported that Juul's advertising generated favorable impressions of e-cigarettes among minors, and from 2017, numerous photos of teenagers smoking Juul cigarettes began to appear on Instagram and Twitter.

As such, Juul faced criticism for encouraging e-cigarette smoking among youth, leading to federal investigations and regulatory pressure, which significantly impacted Juul's sales. Recently, Juul's corporate value was recorded at $4 billion, a steep drop from $38 billion in 2018.

In particular, the fact that hundreds of lawsuits against Juul are ongoing is also one of the factors negatively affecting the company's corporate value.

The lawsuit Juul settled today is just one of several lawsuits filed across the United States, including California, New York, and Washington.

This content was produced with the assistance of AI translation services.