the Juul unicorn under pressure from US authorities


New blow for Juul. The manufacturer of electronic cigarettes is again in the viewfinder of the Federal Trade Commission (FTC), unveiled Thursday, August 26, the Wall Street Journal. The survey aims to analyze the marketing processes of the American startup to determine if it uses deceptive methods, targeting specifically young people and using influencers. The Commission is considering potential sanctions. For the same reasons, Juul has also been under the yoke of an investigation by the US Food and Drug Administration (FDA) since last October.

Marketed for the first time in 2015, Juul electronic cigarettes look like long USB sticks. Purified and stylized, these products quickly met a huge success in the United States. The US unicorn – these unlisted startups valued over a billion dollars – has sold more than 12 million electronic cigarettes and 390 refills of "juice" nicotine in the United States in the first six months of the year. year, according to the Wall Street Journal. It is currently the third most valued unicorn in the world, at $ 50 billion, behind the "Chinese Uber" Didi ($ 56 billion) and Bytedance ($ 75 billion), according to CB Insights.

10,000 dollars disbursed to pay influencers

"Our program for influencers, which was never formal, took place over a short period of testing" completed last year, justified a spokesman to the Wall Street Journal. The startup would have spent less than $ 10,000 to pay a dozen adults over the age of thirty to promote its cigarettes on the Internet.

Since its inception, the startup is regularly accused of encouraging young people to vapot. With AFP, Juul explains not having "never promoted its products to young peopleand claims to have completely changed its marketing methods after a campaign in 2015 targeting adults aged 25 to 34 "could be perceived as attractive for minors". The Californian company now says it wants to seduce smokers over the age of 35 to convert them to vaping.

To end the charges, Juul recently rolled out a battery of measures to combat access to his products for under-age youth. The youngster unveiled Thursday a program to reduce illegal sales to minors. She says she has made more than $ 100 million available to encourage resellers to install a new electronic age verification system. The cash register software is modified to block the sale of Juul electronic cigarettes until an official identification document has been scanned. It also limits each purchase to the sale of a cigarette and four refills. According to Wall Street Journal40,000 points of sale have already adopted the system. Juul announced that it will stop selling at all retailers that did not adopt its age verification system as of May 2021.

Already in the FTC radar for an antitrust investigation

Beforehand, Juul had already removed from all outlets its liquids with sweet and fruity flavors, generally popular with young people, making them only accessible on the Internet. More symbolic, the startup has closed its accounts on social networks, including Facebook and Instagram. She also wrote a "Code of Marketing Ethics", available on her website, where she says that her products are not "not for minors".

This is not the first time Juul has been on the FTC radar. The Commission launched an antitrust investigation last April concerning the acquisition of Altria shares in Juul. The US tobacco company, owner of Marlboro, signed an agreement last December to pay $ 12.8 billion (11.6 billion euros) in cash to acquire 35% of the capital of the startup. The purpose of this investigation is to determine whether Altria can appoint representatives to the board of directors of Juul and convert its 35% non-voting shares into voting shares.

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