Tobacco giant Altria Group is under the microscope of the Federal Trade Commission, thanks to an administrative trial alleging anti-competitive behavior.

WASHINGTON — The Federal Trade Commission (FTC), a very powerful economic competition regulator attached to the U.S. government, has taken tobacco giant Altria Group to court over its investments into e-cigarette maker Juul Labs. According to the FTC, both companies worked to eliminate competition from other companies, including much smaller e-cigarette manufacturers, in direct violation of the federal antitrust laws.

“The Federal Trade Commission has filed an administrative complaint alleging that Altria Group, Inc. and JUUL Labs, Inc. entered a series of agreements, including Altria’s acquisition of a 35% stake in JUUL, that eliminated competition in violation of federal antitrust laws,” indicates the FTC’s public notice of the legal action. “According to the complaint, this series of agreements involved Altria ceasing to compete in the U.S. market for closed-system electronic cigarettes (“the relevant market”) in return for a substantial ownership interest in JUUL, by far the dominant player in that market.”

Reports on the proceedings, thus far, have indicated that Altria intends to defend every action it took in obtaining such a hefty stake into Juul Labs. For a reminder, Altria invested over $13 billion for just a mere third of Juul Labs in 2018. As mentioned, the FTC, for these actions, maintains that Juul (with Altria’s help) cartelized the market by further eliminating competition between the dozens of other companies in this space.

Proceedings in the trial are done virtual, and are expected to continue into the coming weeks. Vaping Post will keep you posted.

For years, small to medium-sized and ‘tobacco company free e-cigarette firms have been critical of Altria and Juul’s relationship. Even our team at Vaping Post has voiced concern, given that the dealings of both of these multi-billion-dollar companies have screwed over indy shops and manufacturers thanks to the monopolization of a market that was once free and truly competitive. While the FTC lawsuit is great news, the federal government should look into the anti-competitive nature of other tobacco-owned e-cigarettes makers. Maybe, a regulatory reckoning is overdue and could bode well for the survival of the smaller market players free of investments from world’s the top five tobacco giants.
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Michael McGrady Jr is a columnist for Vaping Post's English edition. He is a critically acclaimed journalist with awards and recognition from across the industry. He was a finalist for ECigClick's annual vape awards in 2019 and 2020, a KAC Tobacco Harm Reduction Scholarship Fellow in 2019, among other honors. All articles express his own opinion and do not necessarily reflect the Editor's view.