E-cigarette Juul Reaches Large Settlement Over 'Encouraging Underage Smoking' Claims

(Photo by WSJ)

[Asia Economy Reporter Yujin Cho] Juul, an e-cigarette company facing the risk of being expelled from the U.S. market due to promotional activities targeting minors, has agreed to pay a massive compensation exceeding 600 billion won.

On the 6th (local time), according to the Wall Street Journal (WSJ) and others, Juul Labs, a major U.S. e-cigarette manufacturer, agreed to pay a total compensation of $438.5 million (approximately 604.9 billion won) to 33 state governments and the territorial government of Puerto Rico.

The compensation will be paid over a period of 6 to 10 years. The Connecticut territorial government stated that if Juul Labs extends the payment period to 10 years, the final settlement amount will reach $476.6 million.

Under this agreement, Juul Labs will face sales restrictions, including halting marketing aimed at those under 35 years old.

Immediately after the agreement, Juul Labs stated in a press release, "This agreement is an important part of our ongoing commitment to resolve past issues," adding, "This decision aligns with the company-wide restructuring carried out in 2019."

Juul Labs has been under investigation by 39 state governments since 2020 after promotional activities targeting minors significantly increased the smoking rate among minors, becoming a social issue.

Last year, Juul successfully agreed to pay $87 million in compensation to four state governments: Louisiana, Arizona, North Carolina, and Washington. However, thousands of other lawsuits are currently ongoing, so the total compensation amount may increase further.

During the investigation, Juul Labs was accused of promoting e-cigarette consumption among minors through free sample distribution, social media advertising, and various events.

Juul e-cigarettes, which use liquid cartridges inserted into a USB-like rechargeable device, have been called the "iPhone of e-cigarettes" and rapidly increased their market share since launch.

In particular, with sweet fruit flavors and sleek design, Juul was at the center of controversy for encouraging smoking among minors beyond its function as an alternative to traditional cigarettes for adult smokers.

In response, the U.S. Food and Drug Administration (FDA) banned the sale of flavored products except for tobacco and menthol flavors in 2019. In June, the FDA issued a complete sales ban due to concerns about harmful chemicals potentially emitted from liquid cartridges.

Immediately after the sales ban, the U.S. Court of Appeals for the District of Columbia accepted Juul Labs' request, temporarily suspending the ban order. Juul Labs stated that evidence exists showing the public health benefits of e-cigarettes far outweigh potential risks, and if the FDA completes its review of all submitted evidence without political considerations, it expects to receive sales approval.

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