Business News

US sues to force Altria to unwind investment in Juul

Key Points
  • The U.S. Federal Trade Commission said on Wednesday that it had filed a complaint aimed at forcing Altria Group to sell its $12.8 billion investment in e-cigarette maker Juul.
  • The complaint alleges that as competitors, Altria and Juul monitored each other's cigarette prices closely and "raced to innovate."
Juul Labs products are seen at a store in Palo Alto, California on September 21, 2019.
Yichuan Cao | Sipa USA | AP

The U.S. Federal Trade Commission said on Wednesday that it had filed a complaint aimed at forcing Altria Group to sell its $12.8 billion investment in e-cigarette maker Juul.

"For several years, Altria and Juul were competitors in the market for closed-system e-cigarettes. By the end of 2018, Altria orchestrated its exit from the e-cigarette market and became Juul's largest investor," Ian Conner, Director of the Bureau of Competition said in a statement. "Altria and Juul turned from competitors to collaborators by eliminating competition and sharing in Juul's profits."

The complaint alleges that Altria and Juul monitored each other's cigarette prices closely and "raced to innovate."

The FTC also alleges that "Altria also leveraged its ownership of leading brands across tobacco categories to secure favorable shelf space at retailers throughout the United States," according to the statement. "Although early competition resulted in Altria's MarkTen e-cigarette becoming the second most popular brand by market share, by late 2018, Juul vaulted past the industry leaders Altria and Reynolds to become the leading e-cigarette company in the country."

-CNBC contributed to this report.

VIDEO4:3304:33
Massachusetts AG Maura Healey explains the state's lawsuit against Juul