E-cig giant Juul to pay $22.5 million in underage lawsuit

LOS ANGELES — E-cigarette firm Juul has agreed to pay $22.5 million in a US lawsuit that alleged the company deliberately targeted teenagers and lied about how addictive its products are, Washington state's attorney general said Wednesday.

The company, whose wide range of exotic flavored vapes -- including mango and creme brulee -- made it a byword for e-cigarettes in the United States, did not admit any wrongdoing but agreed to rein in its advertising.

In the latest such multi-million-dollar suit it has settled with a US state, Juul Labs agreed to pull commercials that appeal to young people, including on social media. It will also work to ensure stores in the state are not selling its products to anyone underage.

"Juul put profits before people," said Attorney General Bob Ferguson, who brought the suit in 2020.

"The company fueled a staggering rise in vaping among teens. Juul’s conduct reversed decades of progress fighting nicotine addiction.

"Today’s order compels Juul to surrender tens of millions of dollars in profit and clean up its act by implementing a slate of corporate reforms."

A Juul spokesperson told AFP, "this settlement is another step in our ongoing effort to reset our company and resolve issues from the past. We support the Washington State Attorney General’s plan to deploy resources to address underage use, such as future monitoring and enforcement."

This official added: "The terms of the settlement are consistent with our current business practices and past agreements to help combat underage use while offering adult smokers access to our products as they transition away from combustible cigarettes.”

E-cigarettes heat up a cartridge of liquid containing nicotine and other toxins into an aerosol. The user inhales the resulting vapor, mimicking traditional cigarettes.

Proponents of vaping say it is less harmful that traditional tobacco, though the science is not clear. The World Health Organization says using neither is the best course of action.

Opponents say the sweet-tasting flavors are appealing to young people, and the companies peddling them are -- knowingly or otherwise -- getting a whole new generation of people hooked on nicotine.

Washington's suit claimed Juul "flooded social media with colorful ads of young-looking models in fun poses that mimicked many of Big Tobacco’s ad campaigns. 

"At the same time, Juul pushed fruit and dessert flavored products such as mango and crème brulee."

By the end of 2018, Juul had more than 70 percent of the US market for e-cigarettes.

"Much of this was due to its popularity with teens, evidenced by the skyrocketing use of e-cigarettes among teenagers," the attorney general said.

Until 2018, Juul's packaging did not disclose that products contained nicotine, the suit said, despite their having up to five times the level found in similar products.

The settlement announced Wednesday is the latest to involve a lawsuit claiming Juul was marketing its products to children.

Last year, it agreed to pay Arizona $14.5 million and pledged not to target youngsters in the state. Months earlier it said it would pay North Carolina $40 million, but dd not admit liability.

The company is facing similar suits by other states, including New York and California, Bloomberg News reported.

Agence France-Presse 

Slowing digital-ad growth could force change on Google

SAN FRANCISCO — While Google has dominated the online ad market for almost the entirety of its existence, its first quarter earnings report suggests that competitors may be nipping at its heels.

Investors pushed down the stock of Google’s parent company, Alphabet, more than 7% in after-hours trading Monday after it reported revenue that fell short of analyst expectations. That dip could shave more than $65 billion from Alphabet’s market value if it holds when the markets open Tuesday.

Google’s advertising revenue, its key moneymaker, grew by 15 percent to $30.7 billion — slower than investors had hoped. Its digital-ad rivals Facebook and Amazon, meanwhile, both reported strong earnings last week, adding to the investor surprise when Alphabet stumbled despite a strong economy.

Alphabet executives deflected concerns of growing competition on a conference call with analysts Monday, instead suggesting that fluctuating currency rates and changes to Google ad products during the quarter led to the slowdown. The online-ad industry is also still in a yearslong shift to phone and tablet ads and away from ones aimed at desktop users. Ads for mobile devices bring in less money.

Still, the results sparked concerns that Google’s enormously profitable advertising machine might be starting to sputter. Some analysts suggested it’s a signal that Google might need to diversify its business more quickly.

“Does this put more pressure on Google to make more aggressive bets on cloud?” asked Wedbush Securities analyst Dan Ives.

Google executives highlighted the company’s cloud-computing business as one of its fastest growing segments during the Monday call. But the cloud currently accounts for only a small slice of Alphabet’s overall revenue. The company reported $5.4 billion in “other” revenue, which includes cloud, hardware and Play Store purchases.

Hardware sales also slowed during the quarter for the Pixel phone, Google chief financial officer Ruth Porat said on Monday’s call, reflecting a broader industry slowdown in smartphone sales.

Alphabet reported a first-quarter profit of $8.3 billion, down 6% from $8.9 billion in the year-earlier period. Profit amounted to $11.90 per share, well above Wall Street estimates of $10.60.

That figure doesn’t include an expected charge of $1.7 billion to account for a European Union antitrust fine. The fine was imposed in March for anti-competitive practices in Google’s advertising business, referring to a specific exclusivity practice Google now says it has ended.

Google and Facebook, along with other internet companies, are feeling rising heat from regulatory bodies around the world as people and governments question their privacy practices. Some regulators express concern that the largest companies are so big that they’re stifling competition.

Including the fine, Alphabet’s profit of $6.7 billion fell short of analyst estimates. Excluding advertising commissions that Google pays to customers, Alphabet’s overall revenue was $29.5 billion — also falling short of the $30 billion analysts were expecting.

Alphabet also reported widening losses in its “Other Bets” category – a broad segment that includes experimental ventures such as self-driving car business Waymo and internet-balloon subsidiary Loon. Losses grew to $868 million from $571 million a year ago. /kga

source: technology.inquirer.net