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FTC Sues To Unwind Altria's $12.8 Bln Investment In JUUL

The U.S. Federal Trade Commission filed an administrative complaint alleging that Altria Group and JUUL Labs entered a series of agreements that eliminated competition in violation of federal antitrust laws. The agreements include Altria's acquisition of a 35% stake in JUUL.

The FTC alleged that Altria and JUUL monitored each other's e-cigarette prices closely and raced to innovate. Altria also leveraged its ownership of leading brands across tobacco categories to secure favorable shelf space at retailers throughout the United States, the complaint alleged.

"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," said Ian Conner, Director of the Bureau of Competition.

The commission alleged that Altria dealt with competitive threat by agreeing not to compete in return for a substantial ownership interest in JUUL. Weeks after Altria declared its intention to wind down its e-cigarette business, Altria and JUUL announced an agreement that made Altria JUUL's largest shareholder, allowed Altria to appoint an observer to JUUL's Board of Directors, and would have permitted Altria to appoint three members of JUUL's Board after converting its shares to voting securities.

JUUL received over $12 billion, an agreement that Altria would not compete with JUUL for six years, and a range of support services.

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