Juul, Altria Must Face Antitrust Suit Over 2018 Merger

A federal judge has allowed most claims to go forward in antitrust litigation by e-cigarette purchasers accusing Juul Labs Inc and Altria Group Inc of working together to suppress competition in the e-cigarette market, reported Reuters.

US District Judge William Orrick in San Francisco ruled Thursday, August 19, that the plaintiffs – representing proposed classes of direct purchasers, individual indirect purchasers and reseller indirect purchasers – had successfully alleged that they had been harmed by anticompetitive conduct related to Altria’s 2018 acquisition of a 35% stake in Juul.

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David Gelfand of Cleary Gottlieb Steen & Hamilton, a lawyer for Juul, declined to comment. Altria and its attorney Beth Wilkinson of Wilkinson Stekloff did not immediately respond to requests for comment.

Joseph Saveri of the Joseph Saveri Law Firm, a lawyer for the direct purchasers, and Robert Kaplan of Kaplan Fox & Kilsheimer, a lawyer for the indirect purchasers and resellers, also did not immediately respond to requests for comment.

The direct purchasers are consumers who ordered Juul products through its website, while the indirect purchasers bought them from retailers. The resellers are businesses that bought Juul products indirectly.

The plaintiffs claim that Altria, threatened by competition from Juul’s popular e-cigarettes, agreed to discontinue its own MarkTen Elite e-cigarette line in exchange for making an investment in Juul that would allow it to profit from its rival’s success. They say that reduced competition in the e-cigarette market led to fewer choices and higher prices.

The allegations are similar to those in a lawsuit brought in April 2020 by the US Federal Trade Commission, which is in its early stages.

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