FILE PHOTO: Federal Trade Commission seal is seen at a news conference to announce that Facebook Inc has agreed to a settlement of allegations it mishandled user privacy at FTC Headquarters in Washington, U.S., July 24, 2019. REUTERS/Yuri Gripas
WASHINGTON (Reuters) – The U.S. Federal Trade Commission said on Wednesday it had filed a complaint aimed at forcing Marlboro maker Altria Group (MO.N) to sell its investment in e-cigarette maker JUUL.
The FTC has probed Altria’s decision to buy a 35% stake in JUUL, announced in December 2018, for $12.8 billion. The value of the investment has dwindled to $4.2 billion as of late 2019 as a string of vaping-related deaths and potential bans clouded the industry’s prospects.
“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. “Altria and JUUL turned from competitors to collaborators by eliminating competition and sharing in JUUL’s profits.”
Altria’s MarkTen was at one point the second most popular e-cigarette maker, the FTC said in a statement.
The FTC said that Altria responded to JUUL’s threat to its business by agreeing not to compete in exchange for Altria’s investment in the company.
Neither Altria nor JUUL immediately responded to requests for comment.
The FTC said that it had filed the complaint before one of its administrative law judges.
Reporting by Diane Bartz; Editing by Sandra Maler and Sam Holmes