$12.8 Billion Juul Investment Broke the Law, FTC Suit Says
upstart writes in with an IRC submission for SoyCow8162:
$12.8 billion Juul investment broke the law, FTC suit says:
Back in 2018, cigarette maker Altria-formerly known as Philip Morris- apparently saw the writing on the wall for the tobacco industry's future. In December of that year, the company dropped a cool $12.8 billion to gain a 35 percent minority stake in e-cigarette firm Juul. The Juul deal seemed like a particularly clever way to gain a massive toehold in the vaping market as traditional tobacco cigarette use waned-too clever, it seems, as now the Federal Trade Commission is suing to unwind the deal.
The transaction "eliminated competition in violation of federal antitrust laws," the FTC said yesterday, announcing the unanimous vote to move forward with the suit.
At the time of the acquisition, Juul was the leading US e-cigarette brand, the FTC alleges, but Altria's own MarkTen product was already the second most popular brand by market share. Instead of continuing to compete, however, Altria arranged to reap the benefits of its competitor without outright acquiring it.
"Altria orchestrated its exit from the e-cigarette market and became Juul's largest investor," Ian Conner, director of the FTC's bureau of competition, said. "Altria and Juul turned from competitors to collaborators by eliminating competition and sharing in Juul's profits."
Altria, for its part, intends to "vigorously defend" the deal. "We believe that our investment in Juul does not harm competition and that the FTC misunderstood the facts," Altria general counsel Murray Garnick said. "We are disappointed with the FTC's decision, believe we have a strong defense, and will vigorously defend our investment."
Read more of this story at SoylentNews.