[Senate Hearing 117-790]
[From the U.S. Government Publishing Office]
S. Hrg. 117-790
TOXIC MARKETING CLAIMS AND THEIR DANGERS
=======================================================================
HEARING
before the
SUBCOMMITTEE ON CONSUMER PROTECTION, PRODUCT SAFETY, AND DATA SECURITY
of the
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
AUGUST 3, 2021
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available online: http://www.govinfo.gov
_________
U.S. GOVERNMENT PUBLISHING OFFICE
54-259 PDF WASHINGTON : 2023
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
MARIA CANTWELL, Washington, Chair
AMY KLOBUCHAR, Minnesota ROGER WICKER, Mississippi, Ranking
RICHARD BLUMENTHAL, Connecticut JOHN THUNE, South Dakota
BRIAN SCHATZ, Hawaii ROY BLUNT, Missouri
EDWARD MARKEY, Massachusetts TED CRUZ, Texas
GARY PETERS, Michigan DEB FISCHER, Nebraska
TAMMY BALDWIN, Wisconsin JERRY MORAN, Kansas
TAMMY DUCKWORTH, Illinois DAN SULLIVAN, Alaska
JON TESTER, Montana MARSHA BLACKBURN, Tennessee
KYRSTEN SINEMA, Arizona TODD YOUNG, Indiana
JACKY ROSEN, Nevada MIKE LEE, Utah
BEN RAY LUJAN, New Mexico RON JOHNSON, Wisconsin
JOHN HICKENLOOPER, Colorado SHELLEY MOORE CAPITO, West
RAPHAEL WARNOCK, Georgia Virginia
RICK SCOTT, Florida
CYNTHIA LUMMIS, Wyoming
David Strickland, Staff Director
Melissa Porter, Deputy Staff Director
George Greenwell, Policy Coordinator and Security Manager
John Keast, Republican Staff Director
Crystal Tully, Republican Deputy Staff Director
Steven Wall, General Counsel
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SUBCOMMITTEE ON CONSUMER PROTECTION, PRODUCT SAFETY,
AND DATA SECURITY
RICHARD BLUMENTHAL, Connecticut, MARSHA BLACKBURN, Tennessee,
Chair Ranking
AMY KLOBUCHAR, Minnesota JOHN THUNE, South Dakota
BRIAN SCHATZ, Hawaii ROY BLUNT, Missouri
EDWARD MARKEY, Massachusetts JERRY MORAN, Kansas
TAMMY BALDWIN, Wisconsin MIKE LEE, Utah
BEN RAY LUJAN, New Mexico TODD YOUNG, Indiana
C O N T E N T S
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Page
Hearing held on August 3, 2021................................... 1
Statement of Senator Blumenthal.................................. 1
Article dated July 7, 2021 entitled, ``Juul: Taking Academic
Corruption to a New Level'' by David Dayen................. 54
Statement of Senator Blackburn................................... 3
Letter dated July 30, 2021 via e-mail to Hon. Maria Cantwell
from Katherine E. Rumbaugh,Senior Vice President, U.S.
Federal and State Government Affairs, Juul Labs............ 49
Statement of Senator Lee......................................... 36
Statement of Senator Markey...................................... 44
Statement of Senator Lujan....................................... 46
Witnesses
Joshua H. Stein, Attorney General, State of North Carolina....... 5
Prepared statement........................................... 7
Robert J. Jackler, Professor, Stanford University, Founder,
Stanford Research into the Impact of Tobacco Advertising....... 10
Prepared statement........................................... 12
Ariel Fox Johnson, Senior Counsel, Global Policy, Common Sense
Media.......................................................... 23
Prepared statement........................................... 25
Maureen K. Ohlhausen, Former Acting Chair, Federal Trade
Commission..................................................... 39
Prepared statement........................................... 41
Appendix
Response to written question submitted to Joshua H. Stein by:
Hon. Amy Klobuchar........................................... 57
Response to written questions submitted to Ariel Fox Johnson by:
Hon. Amy Klobuchar........................................... 57
Hon. Richard Blumenthal...................................... 58
Hon. Cynthia Lummis.......................................... 58
Hon. Marsha Blackburn........................................ 59
Response to written questions submitted to Maureen K. Ohlhausen
by:
Hon. Ben Ray Lujan........................................... 60
TOXIC MARKETING CLAIMS
AND THEIR DANGERS
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TUESDAY, AUGUST 3, 2021
U.S. Senate,
Subcommittee on Consumer Protection, Product
Safety, and Data Security,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Subcommittee met, pursuant to notice, at 2:47 p.m., in
room SR-253, Russell Senate Office Building, Hon. Richard
Blumenthal, Chairman of the Subcommittee, presiding.
Present: Senators Blumenthal [presiding], Markey, Lujan,
Blackburn, and Lee.
OPENING STATEMENT OF HON. RICHARD BLUMENTHAL,
U.S. SENATOR FROM CONNECTICUT
Senator Blumenthal. Welcome, everyone, to this hearing of
the Subcommittee on Consumer Protection. I thank everyone for
being here in person and remotely, most especially our
witnesses, to a hearing that is entitled, ``Toxic Marketing
Claims and Their Dangers.'' I want to thank Ranking Member
Blackburn for her cooperation and her very important
contributions to this hearing. And again, my thanks to the
witnesses. But I think we all know why we are here.
I personally have seen this movie before. I sued Big
Tobacco and I know how the movie ends, at least in the case of
Big Tobacco, not well. And we are watching the sequel, which
maybe is entitled Big Tobacco will stop at nothing, the hearing
is very reminiscent of both the tactics and the strategy that
Big Tobacco used in marketing its products to children and
teens. And the hearing is highly because the FDA is engaged in
its remarket review of Juul. There is no way, in my view, that
the FDA can approve this product in good conscience, given its
deceptive marketing practices and its pitches and promotions to
children. There is no way that it can condone those practices,
which would be the effect of its approving Juul on the market.
It should be condemning this product not permitting its
continued practices that will addict another generation to
nicotine.
When I think of toxic marketing, nothing comes to mind more
readily than Big Tobacco, and the simple fact is that Juul has
taken a page from Big Tobacco's playbook. Behind me is a
character that was banned under the settlement that we reached
with Big Tobacco, Joe Camel, known by those companies to be
appealing to children. What we have next to it is Juul's
equally deceptive and pernicious pitch to another generation.
And the glamorization and glorification of tobacco use, making
it cool, hip, appealing to kids, we are seeing again now in
Juul. And we are seeing also the attempt to lie to a Government
agency. Big Tobacco came before Congress. Its executives raised
their right hand and they denied that their product was
addictive, that it caused cancer, that it had any bad effects.
There was a suggestion there that perhaps those
representatives of the industry should be prosecuted for
perjury. Juul maybe has been smarter. It has declined an
invitation to be here today. I regret that it has. But
certainly in its representations to the FDA, the question of
truthfulness is very much on our minds. In 2015, Juul launched
on the market without review by the FDA due to years of
regulatory delay its product that was even more addictive than
tobacco use. It was sleeker. It had a stronger nicotine
concentration, and it had the most targeted campaign on the
market. Why was it different in this market? Well, Juul's
founders, James Monsees and Adam Bowen studied Big Tobacco. In
2015, Monsees said, in regard to Big Tobacco's advertising, and
I am quoting, ``it became a very intriguing space for us to
investigate because we had so much information that you
wouldn't normally be able to get in most industries and we were
able to catch up, right, to a huge, huge industry in no time,
and then we started building prototypes.''
We can see the similarities in that marketing in the use of
color and imaging and claims that mirror the pitches made by
Joe Camel and the Marlboro Man. Frankly, they seem kind of
quaint compared to Juul because Juul has opened an entirely new
front of marketing, equally deceptive, but modernized. Social
media, influencers, Instagram hashtags. Appealing to different
platforms, but the same audience, teens and children. In some
ways even more pernicious because it permits targeting more
specifically and even more perniciously.
The unfettered use of social media marketing, and we have
examples of it, so do you, shows these products to be not only
cool and hip, but also the effort is to show them to be safe.
And their subsequent work to get their products in people's--
young people's hands at events, at promotions is also
reminiscent of Big Tobacco. E-cigarette use as a result among
middle schoolers and high schoolers began to increase almost as
soon as Juul entered the market, and in 2017 it was a stunning
78 percent increase in the number of high schoolers using e-
cigarettes. The market there was enticing for Big Tobacco. And
lo and behold, in 2018, Altria, the owner of Philip Morris
International and Marlboro, purchased Juul.
Unsurprisingly, under the guidance of Altria, Juul work to
deceive consumers and the Federal Government. It continues
today. Just this past April, astonishingly, Juul spent $51,000
to buy an entire issue of the Journal of American Health
Behavior, publishing 11 studies touting the manufacturer's
completely unsupported claims that Juul could serve as a safe
alternative to smoking. Ironically, Juul's CEO, K.C.
Crosthwaite was invited to testify here very specifically but
declined citing a desire to, ``defer to the science and seek to
preserve the integrity of an administrative evidence based
process,'' as the FDA reviews their product eligibility for the
market.
Make no mistake, Juul cares nothing about preserving the
integrity of science and evidence. You don't have to listen to
me. All you have to do is look at their ads and read the
American Journal of Health Behavior's 11 studies. It is yet
another recycled marketing tactic of Big Tobacco tactics and
strategy clearly repeated from that playbook. And it is an
attempt to deceive new consumers, current smokers, and others,
as well as the Federal Government of the product safety. So
finally, let me just say, the evidence clearly warrants denial
of access to the market by the FDA between now and September 9.
My hope is that the Attorneys General across the country, we
are going to hear from one of them today, whose efforts to hold
Juul accountable will succeed. Juul has already caused so much
damage in the addiction that it has successfully accomplished.
Addiction to adults and teens alike. But those efforts can
achieve only so much. The FTC as well as the FDA has a
responsibility here, and I call on the FTC to investigate
unfair and deceptive marketing practices of Juul and other e-
cigarette manufacturers and conduct enforcement where
appropriate. Marketing doesn't exist in a vacuum. The youth e-
cigarette epidemic created by Juul, and others is a prime
example of the deadly consequences of unrestrained toxic
marketing.
Enough is enough. We need to change the outcome of this
movie before the sequel produces the same ending. I look
forward to the discussion today and thank you all for being
here. And I turn to the Ranking Member.
STATEMENT OF HON. MARSHA BLACKBURN,
U.S. SENATOR FROM TENNESSEE
Senator Blackburn. Thank you, Mr. Chairman, and welcome to
our witnesses. Thank you for joining us for the hearing. I am
really so pleased that we have this hearing today. And Senator
Blumenthal talked a little bit about what the work he had done
in the tobacco lawsuits. Well before those took place, and as
they were beginning to take place in the 80s, I was Chairman of
the Board of the American Lung Association of Middle Tennessee.
And we were hard at work to make certain that we were
conducting the smoking cessation programs, that we were looking
at some of the reasons that people chose to smoke.
And one of those we found was the influences that
advertising and things had on children. We developed a
children's school health curriculum program and trained
teachers how to teach, working with parents, what to look out
for, dangers of secondhand smoke, those things. But you realize
the power of advertising. And I went back through to look at
some of the iconic ads and things that have made impressions.
In the 1950s, Volkswagen had an ad that was simply a
Volkswagen, and the words ``think small.'' That was it.
Everybody remembers that. In the 80s, we had the Energizer
Bunny, keeps going and going and going. Nashville is a great ad
town. We all remember the Budweiser frogs that would say
Budweiser. Those came about in the 90s. Everybody remembers the
Wendy's, where's the beef? And these are ads that stay with
you. Those messages stay with you. So now we look at the
meteoric rise of the Internet and social media, advertising has
taken on other forms. Kids go to YouTube and watch videos like
Ryan's World, which is a 9-year old boy who reviews toys and
encourages kids to buy those toys through his Amazon store. And
Tik Tok lures kids to keep watching through the use of
algorithms and use, send them targeted content and collect
their data, which to me is atrocious, but they collect the data
for potentially nefarious purposes.
Children, more than anyone, have a hard time identifying
when content is actually an advertisement. I have this
discussion with my grandsons regularly. According to the
American Psychological Association, kids younger than four and
five aren't really able to distinguish programming from
commercials. And until age of seven or eight, most kids don't
recognize that commercials are actually selling to them. Yet
this hasn't stopped companies from viewing kids as a lucrative
market.
By one estimate, advertisers spend more than $12 billion
per year on ads to children, and kids view more than 40,000
commercials annually. The ad revenue for big tech companies in
the U.S. is soaring. Twitter and Amazon's ad revenues were up
nearly 90 percent from last year, while ad sales for Snapchat,
a platform frequented by teens, are up more than 118 percent.
And platforms like Instagram, which Facebook owns, developed a
messenger for Kids app last year and recently announced plans
to create an Instagram for Kids app, which was challenged by 40
states, including Tennessee, and I think you and me.
We know that advertising content can be harmful to kids and
teens. It can expose them to weight loss pills, alcohol, and
other adult substances, or even pave the way for bullying and
risk seeking behavior. For example, Pinterest recently banned
all weight loss ads on its site due to concerns that eating
disorders had increased because of COVID-19 related weight gain
content.
And in just a month ago, police arrested seven men in
northeast Tennessee for sex trafficking after they responded to
decoy advertisements placed on various websites. With all the
new ways that marketing reaches children, we must stay vigilant
to ensure the law keeps pace with changes in technology. Among
other things, Congress should revisit the Children's Online
Privacy Protection Act, or COPPA, to look at issues like how
parents give consent to kids' online activities and companies
that collect voice recordings of kids and teens.
We also need to craft solutions, including a national
privacy law, to crack down on big tech companies that make a
business out of marketing to children. I wanted to touch
briefly on the issue of e-cigarette use by kids and teens,
since I know that is of great interest to the Chairman and some
of my other colleagues on the Committee. I too am greatly
concerned by the idea that products such as e-cigarettes could
be marketed to youth, as well as the large percentage of middle
and high school students who report using these products.
That said, I am optimistic about changes put in place
during the Trump Administration that seem to be yielding
results. For example, since Congress passed laws changing the
legal age for smoking and vaping to age 21, there has been a
one-third drop in high school use of e-cigarettes, and the FDA
has taken steps to remove flavored e-vapor products from the
market and halt to e-vapor marketing toward minors.
I look forward to continuing to work with members of this
committee on these important issues, and also to hearing from
our witnesses today. Thank you, Mr. Chairman.
Senator Blumenthal. Thank you very, very much, Senator
Blackburn. We are really honored and pleased to have with us
very qualified witnesses today. Josh Stein, Attorney General of
North Carolina. Served in the North Carolina--has served as
North Carolina's Attorney General since January 1, 2017. Prior
to serving as Attorney General, he was a North Carolina State
Senator and a Senior Deputy Attorney General for consumer
protection within the North Carolina Department of Justice.
Stein is a graduate of Dartmouth College, Harvard Law School,
and Harvard's Kennedy School of Government.
Dr. Robert Jackler, who is in person, is a professor at
Stanford University. He is at the School of Medicine and is a
practicing surgeon. He is the Founder and Principal
Investigator of an interdisciplinary research group, Stanford
Research Into the Impact of Tobacco Advertising, or SRITA,
which conducts research into the promotional activities of the
tobacco industry.
Ms. Ariel Fox Johnson, also here in person, is Senior
Counsel for Global Policy at Common Sense Media. She is Senior
Counsel for Global Policy and focuses on promoting robust
consumer protections in the online world. She is a graduate of
Harvard College and Law School. Prior to joining Common Sense,
she worked on media, privacy, and intellectual property matters
at corporate law firms.
Maureen Ohlhausen is Former Chair of the Federal Trade
Commission, Acting Chair. Maureen Ohlhausen Chairs the Baker
Botts Global Antitrust Competition Practice, focusing on
antitrust, privacy, data security, and consumer protection
investigations. Prior to her role as Chair, she led the FTC as
Acting Chairman and Commissioner. And prior to that, she led
the FTC's Access--Internet Access Task Force. And she joins us
remotely as well.
We will begin with testimony from Attorney General Stein.
STATEMENT OF JOSHUA H. STEIN, ATTORNEY GENERAL, STATE OF NORTH
CAROLINA
Mr. Stein. Good afternoon, Senator Blumenthal, Senator
Blackburn, and any other distinguished members of the
Subcommittee. I am North Carolina Attorney General Josh Stein.
As one long interested in the topic of today's hearing, I am
very grateful for your giving it this level of attention. The
toxic marketing claims used to peddle e-cigarettes to America's
young people have had a devastating effect.
One story, in 2018, a 16 year old kid would wake up in his
bed in Durham, North Carolina, with his hand wrapped around his
Juul device under the pillow. The very first thing he did when
he woke up, take a puff. Then he would inhale more while
getting ready for school, eating breakfast, driving to school.
He would use it between classes, in the bathroom, with friends
in his car, after practice, after dinner, and while he was
working on his homework. In fact, the only time he did not use
the product was when he was sleeping.
Sadly, this young man's story is not unique. It has become
the life of many high schoolers in North Carolina and around
the country. How did we get here? Slick advertising campaigns
on social media that highlighted kid friendly dessert and fruit
flavors delivered in a sleek, concealable USB device. It has
been a tragic development that is undone years of hard work. In
the late 1990s, nearly 30 percent of teens used tobacco
products. By 2017, that number had dropped to 5 percent of high
schoolers. This remarkable public health victory was the result
of the tobacco master settlement agreement, thank you, Senator
Blumenthal, and the diligent efforts of public health workers
over many years.
But by 2019, those hard won gains had evaporated like a
puff of smoke. 24 percent of high school students, 7 percent of
middle school students now use tobacco products, representing
1.5 million new teen users. In 2018, my office launched an
investigation into Juul. Juul's marketing tactics were
insidious and effective. Juul became so pervasive among young
people that the high school bathroom had become known as the
Juul room. By 2018, Juul had cornered 75 percent of the e-
cigarette market. After my office's investigation, I filed in
2019 the first State lawsuit against Juul, alleging that Juul
designed, marketed, and sold its e-cigs in a manner that
targeted young people.
A few weeks ago, on June 18, North Carolina became the
first state in the Nation to hold Juul accountable. My office
entered a Consent Judgment that forces Juul to not sell e-cigs
in any flavor not approved by the FDA, abandon its marketing to
young people, and stop all social media and influence or
advertising, use state-of-the-art age verification systems,
both online and at retail, pay North Carolina $40 million to
help the tens of thousands of young people addicted quit e-
cigarettes, and provide for a document depository to ensure
that nothing is swept under the rug. My hope is that this
agreement keeps Juul's devices out of kids' hands, its chemical
aerosol out of their lungs, and its nicotine from poisoning and
addicting their brains.
I am extremely proud of my office's victory over Juul here
in North Carolina, as well as a number of other e-cig companies
like Juul. We have driven out of State a number of them that
had been selling and advertising to kids. But there are still
many others operating around the Nation, and there are dozens
of other nicotine based products like disposable cigs, nicotine
patches, and noncombustible tobacco products that use similar
tactics. Candidly, the game of whack a mole that Attorneys
General are playing is untenable.
We in the states need the help of our Federal partners to
protect America's youth, to prohibit nicotine manufacturers and
retailers from marketing and selling to young people, using
youth friendly dessert fruit and mint and menthol flavors, and
developing high concentrations of nicotine that accelerate a
person's dependance.
I have already written the FDA urging it to protect kids by
imposing these types of restrictions on the entire industry,
and a similar multi-state effort is underway. Members of the
subcommittee, I ask that you do all in your power to encourage
the FDA to use its existing authority to protect kids. It is
not too late to turn around this youth vaping epidemic and keep
kids safe, but only if the states and the Federal Government
effectively work together.
Thank you for your attention to this most important issue.
[The prepared statement of Mr. Stein follows:]
Prepared Statement of Joshua H. Stein, Attorney General,
State of North Carolina
Senator Blumenthal, Senator Blackburn, and distinguished members of
the subcommittee:
Thank you for inviting me to testify at this hearing on ``Toxic
Marketing Claims and Their Dangers,'' a topic that has long been of
interest to me and one that I am grateful is getting the attention that
I believe it needs. Toxic marketing claims are a concerning blight on
our efforts to protect consumers, but in recent years, the tactics used
to market e-cigarettes and other non-combustible nicotine products have
targeted a particularly vulnerable population among us: youth.
I want to start by framing the issue we are discussing today. This
is the story of one of North Carolina's own. In 2018, a 16 year old kid
would wake up in his bed in Durham, North Carolina, with his hand
wrapped around his JUUL device. The very first thing he did when he
woke up: Take a puff. Then he would take a few more puffs while getting
ready for school, eating breakfast, and going to school. Throughout the
day, he would continue to take puffs from the e-cigarette product. He
would use it between classes in the bathroom, with friends in his car.
He would use it after sports practice, after dinner, while he was
working on his homework. He would routinely sleep with it under his
pillow. In fact, the only time he said he did not use the product was
when he was sleeping.
This story is not unique. This is the life of many high schoolers
in our State--and indeed, throughout the country.
I came to this issue from a very personal place. A few years ago,
both my sons were in high school, and my daughter in middle school. And
I learned about the resurgence of rampant teen dependence on nicotine
from them and from my friends' stories about their kids. Everyone was
unanimous that the kid-friendly dessert-and fruit-flavored products
made to look like sleek, concealable USB devices and marketed through
slick advertising campaigns on social media with young, hyper-cool
models and influencers using e-cigarette devices and having the time of
their lives were taking our Nation's young people by storm and creating
a new generation of young people dependent on nicotine.
I. The History of Tobacco Use Among Youth
In 1992, 17.2 percent of high school seniors reported having smoked
daily during the past 30 days. By 1997, that number had increased to
24.6 percent. In other words, by 1997, nearly one-quarter of high-
school seniors were habitual cigarette smokers.\1\
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\1\ Pampel, F., Aguilar, J., Changes in Youth Smoking, 1976-2002: A
Time-Series Analysis, Youth Soc. 2008; 39(4): 453-479, available at
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2696267/.
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We have known for decades that virtually all cigarette smoking
begins before 18 years of age.\2\ Virtually no initiation of cigarette
smoking actually occurs after 26 years of age. Initiation of cigarette
smoking often occurs early in adolescence.\3\
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\2\ U.S. Department of Health and Human Services, Public Health
Service, Centers for Disease Control and Prevention, National Center
for Chronic Disease Prevention and Health Promotion, Office on Smoking
and Health, Preventing Tobacco Use Among Young People: A Report of the
Surgeon General (1994).
\3\ The Health Consequences of Smoking--50 Years of Progress: A
Report of the Surgeon General, Patterns of Tobacco Use Among U.S.
Youth, Young Adults, and Adults, available at https://
www.ncbi.nlm.nih.gov/books/NBK294302/.
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Young people in the 1970s, 1980s, and 1990s did not discover and
adopt cigarette-smoking on their own. They were targeted by some of
America's biggest companies. A 1981 research report by Phillip Morris
confirmed that it ``is important to know as much as possible about
teenage smoking patterns and attitudes. Today's teenager is tomorrow's
potential customer, and the overwhelming majority of smokers first
begin to smoke while still in their teens.'' \4\ Cigarette
manufacturers created cartoon figures, employed tactics that portrayed
cigarette use as glamorous and cool, and promoted tobacco products in a
variety of flavors that were attractive to youth. Joe Camel, the
Marlboro Man, and Willie the KOOL Penguin were all household names.
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\4\ Johnston ME, Young Smokers Prevalence Trends, Implications and
Related Demographic Trends (Mar. 31, 1981); Philip Morris (PM) Bates
1000390803.
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In November 1998, the attorneys general of 46 states, five U.S.
territories, and DC entered into an agreement with the four largest
cigarette manufacturers in the United States. This Master Settlement
Agreement forbade the cigarette manufactures from targeting youth by
banning cartoons, transit advertising, most forms of outdoor
advertising, product placement in media, branded merchandise, most free
product samples, and most sponsorships.\5\
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\5\ Master Settlement Agreement, available at https://
publichealthlawcenter.org/sites/default/files/resources/master-
settlement-agreement.pdf.
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The marketing restrictions demanded by the MSA, together with
intensive public and private efforts--including legal restrictions,
workplace policies, public-education campaigns, and other public
initiatives--powered a steep decline in tobacco use among the public as
a whole, including youth. By 2017, the prevalence of smoking had
declined by approximately 67 percent from 1965, and only 14 percent of
adults and approximately 5 percent of high-school students smoked
cigarettes.\6\ It was one of the most successful public health
victories of the last quarter century.
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\6\ American Cancer Society, Cigarette Smoking at Record Low Among
American Adults (Nov. 9, 2018), available at https://www.cancer.org/
latest-news/cigarette-smoking-at-record-low-among-american-adults.html.
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By 2019, those hard-won gains had evaporated like a puff of smoke.
In 2018, there were 1.5 million new underage e-cigarette users. Now,
23.6 percent of high school students and 6.7 percent of middle school
students use tobacco products.
II. My Office's Lawsuit Against JUUL
In 2018, my Office launched an investigation into one e-cigarette
company in particular--a pioneer in the industry that experienced rapid
growth and market dominance within just two years.
I learned from friends that their high-school-aged children were in
the midst of the throes of nicotine dependency: they were experiencing
depression, a sharp decline in academic performance, academic and
social difficulties at school that required them to switch schools, and
eventually, dependency that required medical intervention. Through my
conversations with other students, parents, and educators, I further
learned that e-cigarette use and the resulting nicotine dependency were
widespread problems in classrooms and at home.
JUUL's marketing tactics seemed particularly insidious: While JUULs
and other e-cigarettes seemed ubiquitous in schools--so much so that
school bathrooms were referred to as ``JUUL rooms''--most adults who
did not have frequent interactions with young people remained unaware
of the product or its popularity. It seemed as though JUUL and similar
e-cigarette companies had targeted its products to young people
specifically, while gaining little traction among adults.
After my Office's investigation, in 2019, I filed the first state
lawsuit against JUUL alleging that JUUL designed, marketed, and sold
its e-cigarette products in a manner that targeted young people,
including teens. This was evident through JUUL's product design: it was
sleek, easily concealable, looked like a USB key, and was deemed the
``iPhone'' of e-cigarettes.\7\ JUUL also targeted young people by
infusing its nicotine-filled vaping liquids with flavors that appealed
to youth--flavors like mango, coco mint, cool cucumber, creme brulee,
and fruit medley.\8\ JUUL also targeted young people by using a
patented salt formula that reduced the bitterness of the product and
harshness on the user's throat. In fact, in the instructions JUUL
included in its starter kit, JUUL exhorted new users to not be
discouraged if they found their first puffs too harsh and unappealing;
new users just needed to try enough to find their ``perfect puff.'' \9\
JUUL even built an easter egg into its device called ``Party Mode,''
which allowed users to take a puff from their device and shake the JUUL
device, creating a kaleidoscope of flashing lights.
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\7\ Kaplan, S., Juul Is Fighting to Keep Its E-Cigarettes on the
U.S. Market, The New York Times (July 5, 2021), available at https://
www.nytimes.com/2021/07/05/health/juul-vaping-fda.html.
\8\ Muthumalage, T., Lamb, T., Friedman, M.R. et al., E-cigarette
flavored pods induce inflammation, epithelial barrier dysfunction, and
DNA damage in lung epithelial cells and monocytes, Sci Rep 9, 19035
(2019), available at https://doi.org/10.1038/s41598-019-51643-6.
\9\ See, e.g., https://twitter.com/juulvapor/status/
1050816470350000129.
---------------------------------------------------------------------------
JUUL's marketing decisions, which were a result of deliberate
planning and forethought, also targeted youth. The company launched
itself through the now-infamous Vaporized! campaign, which was focused
on selling a lifestyle of being young, cool, popular, attractive,
confident, and modern. The marketing campaign focused on digital and
print advertising that featured young, attractive, hyper-cool models at
parties, hanging out with each other and having fun. JUUL then took
this campaign on a roadshow to create buzz about the product by
inviting cool, youthful attendees to attend parties at which JUUL gave
away its product for free, hiring ``brand ambassadors'' to help host
these events, and achieving viral participation and generating
amplifying buzz on social media.
This early marketing took on a life of its own. Even after JUUL
pulled its Vaporized! campaign, the damage had been done: sales rose
700 percent in JUUL's first year on the market.\10\ The second year,
sales ballooned 641 percent over sales in the first year.\11\ By 2018,
JUUL had cornered 75 percent of the e-cigarette market and was the
standard-bearer for the industry.\12\
---------------------------------------------------------------------------
\10\ Brodwin, E., The precarious path of e-cig startup Juul: From
Silicon Valley darling to $24 billion behemoth under criminal
investigation, Business Insider (Oct. 31, 2019), available at https://
www.businessinsider.com/juul-timeline-from-startup-to-tobacco-company-
challenges-bans
-2019-9.
\11\ Center for Disease Control and Prevention, Press Release,
Sales of JUUL e-cigarettes skyrocket, posing danger to youth (Oct. 2,
2018), available at https://www.cdc.gov/media/releases/2018/p1002-e-
Cigarettes-sales-danger-youth.html.
\12\ Kaplan, S., Juul Is Fighting to Keep Its E-Cigarettes on the
U.S. Market, The New York Times (July 5, 2021), available at https://
www.nytimes.com/2021/07/05/health/juul-vaping-fda.html.
---------------------------------------------------------------------------
On June 28, 2021, North Carolina became the first state in the
Nation to hold JUUL accountable in our fight against the teen vaping
epidemic. My Office entered a consent judgment with JUUL that extracts
commitments from JUUL across five different areas.
First, JUUL will no longer be able to sell e-cigarette products in
any flavor not approved by the FDA. This is critical to ensuring that
it cannot continue to market to youth by producing products in flavors
that are attractive to children.
Second, JUUL will have to change the way it markets its products.
It will abandon any marketing strategies and content that appeals to
young people. All models must be at least 35 years old. It will stop
using social media advertising, influencer advertising, outdoor
advertising near schools, and it will stop sponsoring cultural events
or concerns. JUUL will also not make any health or therapeutic claims
in its advertising or marketing materials unless specifically
authorized by the FDA.
Third, JUUL is now required to make major changes to the way it
sells its products, both online and at retail. It must now use state-
of-the-art independent age verification systems to ensure that
customers who purchase its products online are of legal age. JUUL will
also have to make sure its third-party sales partners sell only to
customers who are of legal age by instituting point-of-sale
verification systems that use bar codes to verify IDs and by using a
retailer-compliance program that will require JUUL to hire young adults
to perform mystery shopping at approximately 1,000 stores per year with
sanctions for any retailer found to be in violation.
Fourth, in addition to these important conduct-related provisions,
JUUL has agreed to pay North Carolina $40 million. These funds will be
used for proven programs to help youth quit e-cigarettes and to prevent
youth from using e-cigarettes. These funds will make a meaningful
difference in the lives of thousands of North Carolina teens who are
struggling with e-cigarette dependence.
Finally, JUUL will provide for a North Carolina document depository
at a public university where the public can access JUUL's documents
that we have secured through our litigation. We hope that this
transparency will ensure that nothing is swept under the rug involving
JUUL's conduct and that it will help prevent another youth epidemic
from being created again.
My hope is that with this consent judgment, we will be able to keep
this nicotine delivery device out of kids' hands, keep its chemical
vapor out of their lungs, and keep its nicotine from poisoning and
addicting their brains.
III. Forging a Pathway Forward
I am very proud of what my Office has been able to achieve in our
lawsuit against JUUL. We have secured commitments from JUUL--backed by
threat of court sanction--to stop marketing to youth, to stop using
images or models that would attract youth, to stop marketing on
channels popular among youth, to stop marketing flavors that are
attractive to youth, to strengthen online age verification procedures
so that youth cannot buy JUUL products online, and to get serious about
ensuring that retailers are following the law to keep these nicotine
products out of the hands of youth. And we have been able to secure
monetary commitments from JUUL that we will use to help people who are
already dependent on JUUL products and to ensure that we stem the tide
of youth dependence.
But, quite candidly, this game of whack-a-mole is untenable.
The problem of unfair or deceptive marketing of e-cigarette and
other tobacco products requires a solution that combines both
regulation and enforcement. And we in States need the assistance of our
Federal partners.
We need our Federal partners to help regulate the industry at
large. We need industry-wide standards to prohibit manufacturers and
retailers of nicotine products from marketing to youth. We need
industry-wide standards to prohibit manufacturers and retailers of
nicotine products from being able to sell products in youth-friendly
dessert-and fruit-flavors like bubblegum, mango, mint, and menthol. We
need industry-wide standards to prohibit manufacturers and retailers of
nicotine products from being able to sell products in strong nicotine
concentrations that tend to accelerate dependence, particularly among
youth. We need our Federal regulatory partners to help us make clear,
in no uncertain terms, that marketing nicotine products to youth is
impermissible. This is why I am leading a multistate effort to persuade
the FDA to impose these types of restrictions on all companies
manufacturing and selling nicotine products in the United States.
And we need our Federal partners to join us in driving home the
message that marketing nicotine products to youth will not be tolerated
by helping us enforce existing consumer protections. One of the biggest
differences between the combustible cigarette market in the 1990s, when
the MSA was entered, and the nicotine market now is that the nicotine
market is no longer controlled by four companies. While I am proud of
our work against JUUL, there are many companies just like JUUL out
there, using the same business model and marketing tactics. While my
Office has taken action against several of them and driven them out of
North Carolina, there are still others operating in our State and
others. And there are dozens of other companies that manufacture and
sell other nicotine products, like disposable e-cigarettes, nicotine
pouches, and non-combustible tobacco products, using the same business
model and marketing tactics. The states cannot do all this work alone
and need the help of the Federal government, just as the Federal
government needs the states. We ask that the FTC to enforce existing
Federal consumer protection laws by investigating the actions of e-
cigarette and other nicotine manufacturers and retailers and their
marketing practices that target youth.
We have done this before. When faced with an epidemic of teen
tobacco use, we have come together, pushed back, and made great
progress in reversing that trend. We can do it again. All we need is a
unified commitment by the states and our Federal partners to use the
tools available to us to achieve this result. I am confident that using
this whole-of-government approach, we can, once again, curtail the
effects of nicotine dependence on our youth.
Thank you again for inviting me to testify today. I look forward to
your questions.
Senator Blumenthal. Thank you, Attorney General Stein. And
you have good reason to be proud of the work done by your
office, and I think your plea to us in the Congress is very,
very well taken. It does require a partnership. And we are
going to turn now to Dr. Jackler.
STATEMENT OF ROBERT K. JACKLER, PROFESSOR, STANFORD UNIVERSITY,
FOUNDER, STANFORD RESEARCH INTO THE IMPACT OF TOBACCO
ADVERTISING
Dr. Jackler. Thank you, Senator Blumenthal and Blackburn,
for inviting me here today. I am really honored to follow AG
Stein. While the accomplishments in North Carolina Juul
settlement are a good start, and he and his team certainly
deserve our appreciation, their settlement covers only a single
brand, in a single state, and in a limited fashion. One
settlement alone cannot undo the lasting impact of what Juul's
design and marketing have done.
America's youth remain drawn by Juul's stealthiness, its
reputation for coolness, and its mentholated minty flavor, the
high strength nicotine that hooks them. Due to the company's
actions and inactions, the brand has created a durable teen
identity and is too tarnished, in my opinion, to remain on the
market. Clearly, the lessons learned from the Juul fiasco are
important, but the issue is much broader. Faced with declining
cigarette sales, all major tobacco companies are adding e-
cigarettes, heated tobacco, and oral nicotine pouches to their
product lines. They come in flavors that appeal to kids and
deliver nicotine at levels that would make the Marlboro Man
envious.
A comprehensive nationwide regulatory framework spanning
all of these emerging tobacco products is needed. You know, I
suspect that most Americans think that the worst excesses of
tobacco late in the 20th century, when countless ads glorified
glamorous and sexy cigarettes and reassured a worried public
that more doctors smoke Camels than any other brand. While
today's tobacco companies loudly claim that they advertise
ethically, my in-depth study of tobacco marketing makes clear
that they continue to use the same methods as they used before.
Ever since the tobacco industry started advertising, it is
linked what it does to popular culture. During wartime,
cigarettes were associated with victory. During women's lib,
you have come a long way, baby.
And today's tobacco products are marketed as natural and
organic, even though they are equally deadly. As soon as COVID
arrived, tobacco marketers offered free hand sanitizers with
their purchase, gave tobacco branded face masks, and use COVID-
themed slogans. You know, tobacco advertising has long been
regulated by the Federal Government, since the 1920s, with a
series of actions by Congress, by the FTC, and the FDA. In
1970, Congress banned tobacco advertising from broadcast media,
which at that time was just TV and radio.
The legislators of those days could not have foreseen that
online social media would come to dominate mass media,
especially among American youth. Facebook, Instagram and
Twitter are widely exported--exploited, excuse me, by tobacco
marketers. Once a company makes a product a teen fad, kids take
over and promote it for them. So based upon a clear analogy to
the 1970 radio TV ban, there is a strong justification to
eliminate all tobacco marketing from social media. So up until
1964, tobacco ads featured endorsements by movie stars and
heroes, and yes, even U.S. Senators.
Tobacco marketers made extensive use of influencers today
who are social media stars with vast online followings, often
teen idols. Once again, ample precedent exists to end this
practice. So flavored tobacco, including menthol, is a major
draw for youth. In 2020, Congress extended the ban on flavored
cigarettes to include only pod type e-cigarettes like Juul. But
such a narrowly focused ban is doomed to fail because the
industry simply innovates around it. So predictably, Puff Bar
and countless other sweetened, fruity Chinese made disposable
cigarettes soon flooded the American market.
To protect youth, it is so important all flavors, including
menthol, should be banned from all tobacco products. So Federal
law defines a tobacco product as derived from any part of a
tobacco plant. With a mandatory FDA deadline looming, as we
heard from Senator Blumenthal, marketers introduced a series of
tobacco-free brands, claiming they had only synthetic nicotine
and thus were exempt from Federal regulation and even tobacco
taxation. These brands are sold on major online stores,
including Amazon, even to teenagers. And despite their policy
prohibiting all tobacco sales, we see it on target.com, these
things are breaking through because it is not being picked up
by their filtering, if you will, for tobacco products.
In July 2020, the FDA ordered market leader Puff Bar to
cease sales as it hadn't been approved. So what happened?
Shortly thereafter Puff Bar resumed sales, and it is now made
of synthetic nicotine and claims that it is immune from FDA
regulations. So logically, if it isn't tobacco, the nicotine
products like this are unapproved drugs, and the FDA should
have clear authority to remove them all from the market.
As a matter of public health policy, protecting teens from
nicotine addiction is of the utmost importance. Almost all
tobacco use begins during teen years. Very few 40 year olds
say, ``I think I am going to start smoking today.'' After all,
the single most effective means of reducing smoking in the
adult population is to keep kids from becoming addicted in the
first place.
We need comprehensive regulation, and it should encompass
advertising, flavors, and nicotine. I thank you.
[The prepared statement of Dr. Jackler follows:]
Brief Biography of Robert K. Jackler, MD:
Dr. Jackler is a professor at the Stanford University School of
Medicine and is a practicing surgeon. He is the founder and principal
investigator of an interdisciplinary research group (Stanford Research
Into The Impact of Tobacco Advertising or SRITA) which conducts
research into the promotional activities of the tobacco industry. SRITA
collected 56,600 original tobacco advertisements which were donated to
the National Museum of American History of the Smithsonian Institution.
A public exhibit at NMAH drawn from this collection opened in April
2019. SRITA maintains an extensive online tobacco advertising research
database (tobacco.stanford.edu) which has over 813,000 unique users.
As an academic research program, SRITA scholars conduct a wide
spectrum of research into the promotional behaviors of the tobacco
industry. SRITA focuses upon original scholarship utilizing the unique
resource of our advertising collection. Our early academic focus was
primarily an historical study of advertisements from the 20th century.
In recent years, our research has focused upon the design and marketing
of emerging tobacco products such as e-cigarettes (e.g., JUUL), heated
tobacco (e.g., IQOS), and novel nicotine delivery systems. Our research
is primarily designed to provide scientific data and analysis to inform
regulators and legislators.
Synopsis of Opinions:
Today's Tobacco Advertising Conveys the Same Messages as it Did in the
1950s:
I suspect that most Americans think that the worst excesses of
tobacco marketing lay in the 20th century when countless ads glorified
smoking as glamorous and sexy and a worried public was reassured that
``More Doctors Smoke Camels.'' While the tobacco industry loudly claims
they advertise ethically today, my in-depth study of tobacco
advertising makes it clear that they still convey the same messages as
during the earlier era. Most importantly, knowing that almost all
nicotine addiction begins during teen years, tobacco advertisers use
every trick in the book to lure young people to become their lifelong
customers.
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Tobacco Advertisers Associate Their brands with Whatever is Popular in
Culture:
Ever since the tobacco industry started advertising, it has linked
its products to whatever is popular in culture. During wartime
cigarettes were associated with bravery and victory, during women's
liberation you got ``you've come a long way, baby'', and today, tobacco
products are marketed as ``natural and organic'' even though they are
equally deadly. As soon as COVID-19 arrived, tobacco marketeers
recognized the opportunity: Offering free hand sanitizer with purchase,
giving out branded facemasks, and ads sporting slogans such as ``stay
home and vape'' and ``work from home with the calming effect of sweet
caramel tobacco.''
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The Tobacco Industry is Introducing a Wide Assortment of New Products:
By now, most of us are familiar with the story of how JUUL drove an
epidemic of nicotine addiction among American youth. Clearly the
lessons learned from the Juul fiasco are important--but the issue is
much broader than this one brand. Faced with declining sales of
traditional cigarettes, major tobacco companies are introducing non-
combustible nicotine delivery products including e-cigarettes, heated
tobacco, and a variety of recreational oral nicotine products (pouches,
lozenges, & gums). While the accomplishments of North Carolina in its
JUUL settlement is a good start, their settlement covers only a single
brand in a single state. A comprehensive nationwide regulatory
framework spanning both traditional and emerging tobacco products is
needed.
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Tobacco Advertising Has Been Regulated by the Federal Government for a
Century:
Promotion of tobacco products has been regulated by the Federal
government since the 1920s with a series of actions adopted by
Congress, the FTC, and FDA. In each and every case, the industry has
effectively circumvented governmental regulation designed to protect
the public from their predations. For example, in 1970 Congress banned
tobacco advertising from broadcast mass media, which at the time was
limited to television and radio. Half a century ago Congress could not
have conceived the revolution in mass media today. Social media is a
powerful form of mass media, especially among its heaviest users--
teenagers. Facebook and Instagram are widely exploited by tobacco
marketers. In former days, the tobacco ads featured movie stars and
sports heroes--today they make extensive use of influencers--social
media stars with vast online followings. There is strong justification
to eliminate all tobacco marketing from social media. There is a clear
analogy to the precedent set by the 1970 Federal ban TV/Radio ban.
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Selected Highlights of Tobacco Advertising Regulation
1929 Weight Loss Claims Federal Trade Commission
1955 Unsubstantiated health Federal Trade Commission
claims
1964 Celebrities + Athletes Cigarette Advertising
Code
1965 Warning Labels Congress (Federal
Cigarette Labeling and
Advertising Act)
1971 TV and Radio ads (FTC) Congress (Public Health
Cigarette Smoking Act)
1998 Sponsorships Master Settlement
Cartoon characters Agreement
Outdoor advertising
Movie product placement
Sampling except where
underage excluded Brand
on merchandise (e.g.,
tee shirts)
2009 Flavored Cigarettes
(except for menthol)
Congress (Family Smoking
Prevention Act)
Mild, light, low
descriptors
Claims of harm reduction
Flavored Tobacco is a Major Attractant to Youth:
Flavored tobacco is a major draw for underage youth. For centuries
tobacco came in only one flavor-plain tobacco. In the mid-20th century
menthol cigarettes were introduced and became popular among youthful
starter smokers and especially African Americans. None of this was
accidental--to drive demand these groups were comprehensively targeted
by the makers of Kool, Newport, and Salem via intensive advertising
bombardment. Today tobacco comes in thousands of flavor varieties,
especially e-cigarettes and mini-cigars, in sweet treat flavors such as
cotton candy, gummy bear, and mango. In an attempt to hide their youth-
oriented flavors brands adopt ``concept'' flavor names hence Fruity
mango becomes ``gold,'' berry blast--``solar,'' and other sweet, fruity
and creamy flavors carry names like ``Unicorn puke.''
In 2009, Congress banned all flavors from cigarettes except for
tobacco and menthol. In 2020, the favor ban was extended, but narrowly
focused on pod-type e-cigarettes. Such narrowly focused bans are doomed
to fail as the industry simply innovates around them--in this case by
offering disposable e-cigarettes in every conceivable sweet and fruity
flavor. To protect American youth, flavors including menthol should be
banned from all tobacco products.
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The ``Tobacco-Free'' and Synthetic Nicotine'' Legal Loophole Urgently
Needs to be Closed
More than a decade after the FDA was given authority over tobacco
products it is invoking its regulatory authority over newly emerging
products via the PMTA (Premarket Tobacco Application) process. Numerous
small companies lack the resources to fulfill the rigorous application
requirements, which necessitates numerous costly clinical and
toxicological investigations, have no choice other than abandoning
their business or finding a means of being exempted from the PMTA
process. As the deadline for the PMTA approached, a surge of nicotine
containing brands emerged on the U.S. market sporting claims such as
``tobacco-free nicotine'' and/or ``synthetic nicotine.''
The 2009 Federal law defined a tobacco product as derived from any
part of the tobacco plant. In a cynical attempt to exempt their
products from regulation, many companies introduced brands they claim
are ``tobacco-free,'' mostly based upon the use non-tobacco derived
``synthetic nicotine.'' Advertisements for products emphasize their
supposed ``cleanliness and purity'' implying that they are more
healthful. The inclusion of the word ``free'' suggests freedom from
harm.
These ``tobacco-free'' nicotine brands are widely sold on major
online stores (e.g., Amazon, eBay, Target) which have policies
prohibiting tobacco sales, and are easily purchased by underage
individuals. Some of these brands claim exemption from tobacco taxation
and ignore provisions of the PACT Act (which specifically references
synthetic nicotine).
The case of Puff Bar disposable e-cigarettes is illustrative.
Following the January 2020 ban on flavored pod e-cigarettes, Puff Bar
flourished due to its close resemblance to JUUL and its innumerable
sweet and fruity flavors. In July 2020, the FDA ordered Puff Bar to
cease its sales as it had not been authorized to be on the market.
Shortly thereafter, Puff Bar resumed sales and claimed that it was now
formulated with synthetic nicotine and thus exempt from regulation.
This highlights the urgent need for Congress to close the 2009 loophole
by designating all forms of nicotine to be either a drug or tobacco
product.
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Smoking Cessation Claims:
While quitting is a more desirable outcome, it is a worthwhile goal
to help adult smokers to transition to a less harmful means of
satisfying their nicotine addiction. While it will not be known for
certain until decades have passed, non-combustible products such as e-
cigarettes are likely safer than cigarettes. So far, while e-cigarettes
are a bit more effective than traditional nicotine replacement
therapies (e.g., patches, gums), durable smoking cessation still only
succeeds in a small minority of cases. This is offset by smokers using
cigarettes (where allowed) and e-cigarettes (where smoking is banned).
This so-called dual use deepens nicotine addiction. The lack of
cessation efficacy has not prevented advertisers from messaging
potential customers that their brands is good ``switching'' or an
``alternative'' and other clever but easily understood slogans such as
``it worked for me.''
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The Nicotine Arms Race and the Need for a Cap on Nicotine
Concentration:
One legacy of JUUL is that it triggered a ``nicotine arms race''
tripling the average concentration of nicotine in e-liquids from 1-2
percent to 5-6 percent--a potently addictive level for nicotine naive
youth. Initiating nicotine addiction via conventional cigarettes takes
considerable effort on the part of a teenager. Upon initial experience
the smoke triggers coughing fits due to its harshness. Also, tobacco
smoke is an acquired taste and is notably unpleasant to most non-
smokers. If a beginner pushes beyond a limited number of puffs, the
youth typically get sick, with nausea and even vomiting.
The experience of being introduced to nicotine via a high nicotine
e-cigarette is markedly different. Because the vapor is much less
noxious than cigarette smoke and tastes sweet or fruity, teens can take
in large quantities of nicotine rapidly. Many teens report a nicotine
``head buzz'' with JUUL--a pharmacologic effect of high levels of
nicotine on the brain seldom seen with smoking. The social nature of
vaping, and the urge of teens to join the crowd and to eagerly do what
is popular among their peers, leads to excessive use with rapid
induction of nicotine tolerance and deepening addiction. Some teens
have gone so far as to trigger seizures due to nicotine overdose using
high nicotine e-cigarettes.
Most teens do not understand addiction and believe they can quit
anytime, even though they wake up at night with chills and cravings and
reach for their e-cigarette. Many teens suck on their device first
thing in the morning (a clear indicator of addiction) and periodically
throughout the day. Nicotine addiction is notoriously hard to break.
The consequences of withdrawal are intensely unpleasant, which becomes
a major deterrent to quitting. Once hooked on nicotine, many teens
graduate to other tobacco products, including cigarettes.
Europe, the United Kingdom, and Israel all limit the amount of
nicotine in e-cigarettes to under 2 percent. In the U.S. there is no
cap enabling the market to be flooded with super high nicotine
products. A disturbing new trend is large volume disposable e-
cigarettes. A JUUL pod delivered approximately the same number of puffs
(200) at similar nicotine delivery to a pack of 20 cigarettes.
Regulation is needed which caps the concentration of nicotine (e.g., to
2 percent as in Europe, UK, and Israel).
Large Volume e-Cigarettes and the Need for a Cap on Nicotine Volume
Some disposable e-cigarettes deliver thousands of puffs of highly
concentrated nicotine initially 1000-2000 puffs and 5000-6000 puff
monsters with the nicotine equivalent of some 3 cartons full of
cigarettes (i.e., @ 600 cigarettes worth of nicotine) at a very modest
price. Regulation is needed which caps the volume of nicotine per
product (e.g., to no more than equivalent to single pack of
cigarettes).
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Disingenuous Public Relations Example: Philip Morris ``Foundation for a
Smoke Free World''
In September 2017, Philip Morris International (PMI) launched what
it dubbed a ``Foundation for a Smoke-Free World.'' The company pledged
to spend $1 billion over a 12-year period, $80 million per year,
purportedly to support tobacco harm reduction by accelerating research
into alternatives to cigarettes. While the company claims that the
Foundation is free from PMI's control, critics have pointed out that
the corporation maintains substantial control. Incongruous slogans such
as ``A tobacco company that actually cares about health,'' which
headlined a full-page Wall Street Journal advertisement in January
2019, are revealing. They also featured advertisements with the slogan:
``Our New Year's resolution--We're trying to give up cigarettes.'' It
seems clear that PMI's ``unsmoke campaign'' is not focused upon smoking
cessation, but rather legitimizing and promoting alternative nicotine
delivery--i.e. its IQOS product. As PMI remains active in undermining
policies intended to reduce cigarette use, many public health advocates
believe that the company created the Foundation as a public relations
measure to burnish its image while promoting its IQOS brand. While it
should be obvious, it should be emphasized that if PMI were serious
about achieving a ``smoke free world,'' it would halt its aggressive
worldwide marketing of Marlboro and its other heavily promoted
cigarette brands.
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Plummeting Price of Nicotine Addiction:
An observation about predatory pricing strategies in 2021. JUUL
started out with a price of $50, a challenge for teens with limited
discretionary income. This month I bought a JUUL in a California gas
station at the nationally advertised price of only $4.99--10 percent of
JUUL's original price. For a mere $1.49 I bought a VUSE e-cigarette, an
RJ Reynold's product, a price far no doubt well below the cost of its
manufacture.
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The Need for Comprehensive Regulation
As a matter of public health policy, protecting teens from nicotine
addiction is of utmost importance. After all, the single most effective
means of stemming smoking among the adult population is to keep kids
from becoming addicted in the first place. Comprehensive Federal
regulation is needed to encompass advertising (content and delivery
channels), flavors, and nicotine (Limit on both concentration and
volume).
Selected SRITA Academic Papers
Jackler RK, Chau C, Getachew BD, Whitcomb MM, Lee-Heidenrich J,
Bhatt AM, Kim-O'Sullivan, Hoffman ZA, Jackler LM, Ramamurthi D. JUUL
Advertising Over its FirstThree Years on the Market. White Paper,
Stanford University. (http://tobacco.stanford.edu/juulanalysis)
February 2019
Ramamurthi D, Chau C, Jackler RK. JUUL and other stealth
vaporisers: hiding the habit from parents and teachers. Tob Control.
2018 Sep 15. pii: tobaccocontrol-2018-054455. doi:10.1136/
tobaccocontrol-2018-054455.
Jackler RK, Ramamurthi D. Nicotine arms race: JUUL and the high-
nicotine product market. Tob Control. 2019: 28; 623-628.
Jackler RK, Ramamurthi D, Louis-Ferdinand NG. Rapid Growth of JUUL
Hashtags After the Company Ceased Social Media Promotion. White Paper,
Stanford University.(tobacco.stanford.edu/hashtagjuulgrowth) 2019
Jackler RK, Ramamurthi D, Axelrod AK, Jung JK, Louis-Ferdinand NG,
Reidel JE, Yu AWY, Jackler LM, Chau ``Global Marketing of IQOS: The
Philip Morris Campaign to Popularize ``Heat-Not-Burn'' Tobacco.'' SRITA
White Paper (313 pages) Stanford University. (http://
tobacco.stanford.edu/tobacco_main/publications/IQOS_KPaper_2-21-
2020F.pdf
Jackler RK, Li VY, Cardiff RAL, Ramamurthi D. Promotion of tobacco
products of Facebook: policy versus practice. Tob Control. 2019; 28:
67-73.
Qian ZJ, Hill MJ, Ramamurthi D, Jackler RK. Promoting Tobacco Use
Among Students: The U.S. Smokeless Tobacco Company College Marketing
Program. Laryngoscope. 2020 Nov 13. doi: 10.1002/lary.29265. Epub ahead
of print. PMID: 33185280.
Ramamurthi D, Chau C, Jackler RK. Exploitation of the COVID-19
pandemic by e-cigarette marketers [published online ahead of print,
2020 Aug 27]. Tob Control. 2020;tobaccocontrol-2020-055855.
doi:10.1136/tobaccocontrol-2020-055855
Ramamurthi D, Gall PA, Ayoub N, Jackler RK. Leading-brand
advertisement of quitting smoking benefits for e-cigarettes. Am J
Public Health. 2016;106: 2057-2063.
Jackler RK, Ramamurthi D. Unicorns Cartoons: Marketing Sweet &
Creamy e-Juice to Youth. Tob Control 2017;26:471-475
Ramamurthi D, Fadadu RP, Jackler RK. Electronic cigarette marketers
manipulate anti-tobacco advertisements to promote vaping. Tob Control
2015 (e-ahead of print). (doi:10:1136/tobaccocontrol-2015-052661.)
Manuscripts undergoing peer review:
Tobacco or Not Tobacco: Ambiguities in Marketing ``Tobacco-Free''
and ``Synthetic Nicotine'' Products
Flavor Spectrum of the Puff Family of Disposable e-Cigarettes
Senator Blumenthal. Thank you very much, Dr. Jackler.
Excellent. Ms. Johnson. You will have to turn on your
microphone.
STATEMENT OF ARIEL FOX JOHNSON, SENIOR COUNSEL, GLOBAL POLICY,
COMMON SENSE MEDIA
Ms. Johnson. Thank you. Good afternoon, Chair Blumenthal
and Ranking Member Blackburn. Thank you for inviting me today
and for examining the harms that digital marketing poses to
kids. Today's online ecosystem leaves children open to
commercial exploitation and persuasion of all stripes,
including by sellers of toxic and unhealthy products. Congress
must act to create safeguards that protect young people.
I am Ariel Fox Johnson, Senior Counsel for Global Policy at
Common Sense, the leading organization dedicated to helping
kids and families thrive in an increasingly digital world. I am
also a mother of two, seeing firsthand the effects of digital
marketing on kids. My testimony today emphasizes three main
points. First, children and teens are uniquely vulnerable to
advertising, and especially to the highly personalized,
targeted digital ad techniques of today that include influencer
marketing, advergames, and native ads.
Second, digital marketing is causing real harms for young
people, contributing to obesity, to crash diets and low self-
esteem, to tobacco and alcohol use, to a culture of
surveillance, to compulsive technology use. And third, Congress
can and should enact safeguards to protect children from
targeted and manipulative online marketing that takes advantage
of their age and their lack of experience. Pediatricians and
ad-execs agree, children and teens are uniquely vulnerable to
advertising. Young kids can identify ads and older kids have
trouble understanding that an ad's goal is to sell them
something and that it is biased. That is why elsewhere there
are rules about marketing to kids.
On TV, hosts can't hawk products and commercials have to be
distinguished from content. On billboards near schools and
publications with significant teen readership, tobacco ads are
limited. But at the digital world, where marketing techniques
are even more pernicious, these safeguards for kids do not
exist. Ads online are often indistinguishable from content. One
study found a third of posts on Instagram are actually ads.
Almost half of videos on YouTube watched by young children
promote products for kids to buy.
And fast food companies weave their products into game
storylines. Ads are also offered in exchange for easier
gameplay. This implicit targeting makes ads even harder for
kids to identify and to assess. And offering rewards in
exchange for viewing keeps kids hooked in a vicious loop. Ads
today are also highly personalized, a fact that most children
and many adults do not realize, fine-tuned to specifically
appeal to the child at hand, and filtered to create a vision of
reality that benefits advertisers and puts kids at risk. Kids
find this creepy. They feel that marketers are stalking them.
And this leads to a culture of surveillance where they feel
constantly watched. This also enables advertisers to exploit
specific vulnerabilities, such as targeting teens who are
profiled as interested in gambling with ads for poker chips.
Ads today also rely on figures kids trust, peers, celebrities,
beloved cartoon characters, platform social proofs by showing
kids that other people that they respect and admire are buying
it or doing it, taking advantage of para-social relationships
that young people have developed.
Indeed, studies show children and teens are not as critical
in their assessing influence or marketing. Research has shown
that children who view influencers pushing unhealthy snacks
consume significantly more calories. Juul got around to social
media ad ban by hiring celebrities popular with teens to use
its products, and teens who see vaping ads are much more likely
to vape. Other celebrities have pushed baseless diet products
to impressionable teens, and it is not surprising that
researchers have found an increase in time on Instagram is
associated with an increase in eating disorders.
Companies know that if they make a product or activity cool
or irresistible and get some early adopters, teens will
basically sell it to each other via viral marketing. Large
companies take advantage of manipulative tricks and techniques
to hook young people with essentially no repercussions today.
Congress and the Administration can and should act and take
concrete steps to better protect children's well-being. We need
to better resource the Federal Trade Commission. There are
countless influencer ads today that violate their current
endorsement guidelines, but we also need updated guidelines,
including those that address kids and teens.
And we should look to other agencies who have experience
with this, like the FTC and the FDA. We need to update COPPA
and pass privacy laws that protect youth and all of us from
targeted advertising. We need a children's television act for
the digital age. Rules addressing host selling and the pushing
of alcohol, tobacco, and other unsafe products.
And moving forward, we need timely and independent research
so that next time we can stay ahead of the marketing curve. Our
children deserve nothing less. Thank you again and I look
forward to questions.
[The prepared statement of Ms. Johnson follows:]
Prepared Statement of Ariel Fox Johnson, Senior Counsel, Global Policy,
Common Sense Media
Good afternoon Chair Blumenthal, Ranking Member Blackburn, and
members of the Subcommittee. Thank you for the opportunity to appear
before you and for your interest in deceptive marketing practices and
how they can cause real harm to kids, including by pushing toxic and
unsafe products.
My name is Ariel Fox Johnson, Senior Counsel for Global Policy at
Common Sense Media. Common Sense, founded in 2003 by CEO James P.
Steyer, is the Nation's leading organization dedicated to helping kids
and families thrive in a rapidly changing digital world. We give
parents, teachers, and policymakers unbiased information, trusted
advice, and innovative tools to help them harness the power of media
and technology as a positive force in all kids' lives. Common Sense has
provided millions of families and kids the resources to think
critically and make responsible choices about the media they create and
consume.
Digital marketing to young people has grown increasingly insidious
in its methods, causing real harm--particularly when these methods are
used to push unsafe products, but also because these methods simply
take advantage of kids' naivete. Kids are defenseless against data-
driven, highly personalized advertising techniques that merge content
with commercials, are woven into video games, and make heavy use of
peer and celebrity influencers and trusted characters. These tactics
exacerbate harms when ads are used to push unhealthy food and drink,
tobacco products, diet pills, weapons, alcohol, gambling, and other
``adult'' products and activities. Such marketing can lead kids to
unknowingly spend thousands of dollars on virtual products in video
games. And these practices feed into a culture of surveillance and
compulsive usage.
Your hearing today is extremely important to the health and well
being of children. And there are a number of concrete steps Congress
and the Administration can and should take to better protect children
and families online that I will discuss below. They include stronger
enforcement powers and increased resources for the Federal Trade
Commission, as well as the adoption of key legislation to prohibit
targeted advertising and tracking of children and teens, require ad
transparency, prevent manipulative commercial practices, and fund more
independent research into online marketing and the overall impact of
digital media use on children's health.
A. Common Sense's history of helping families navigate the digital
world
Common Sense reaches 125 million households with its age-
appropriate media ratings and reviews, and our award winning Digital
Citizenship Curriculum is the most comprehensive K-12 offering of its
kind in the education field; we have over 1 million registered
educators using our resources in more than half of U.S. schools. Our
Research Program, including our Common Sense Census, provides
independent data on children's use of media and technology and the
impact it has on their physical, emotional, social, and intellectual
development. Our Privacy program evaluates popular ed-tech and other
products used at home and in the classroom, and we actively support the
unique needs of low-income families and families of color, empowering
them to navigate the digital world with confidence.
Common Sense has long advocated for better online protections for
children and teens from unfair and deceptive marketing. We have
researched advertising practices online, how the digital world affects
body image and self esteem, and the power of influencers.i
We have highlighted how online ad techniques can push unhealthy food,
products and unwanted spending, and advocated for more regulatory
safeguards. ii We have supported bans on junk food
advertising and encouraged media outlets to refuse to accept
advertising from e-cigarette makers. iii And we have
supported additional steps to limit youth access to vaping and other
flavored tobacco products. Our digital citizenship curriculum teaches
kids how to assess online materials and content, including advertising.
For example, our lesson on anti-vaping media literacy helps students
think critically about Juul's marketing messages and the manipulative
tactics used to addict them to nicotine. iv
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\i\ Rideout, Victoria. (January 28, 2014). Advertising to Children
and Teens: Current Practices, Common Sense Media. Pai, Seeta and Kelly
Schryver, (January 21, 2015). Children, Teens, Media, and Body Image,
Common Sense Media. Robb, Michael B. (2020). Teens and the News: The
Influencers, Celebrities, and Platforms They Say Matter Most, Common
Sense Media.
\ii\ Fox Johnson, Ariel. (June 22, 2020). Comments to the Federal
Trade Commission on Guides Concerning the Use of Endorsements and
Testimonials in Advertising, Common Sense Media,
\iii\ Common Sense has endorsed the Reversing the Youth Tobacco
Epidemic Act to combat children's nicotine addiction and encouraged
media outlets to refuse to accept advertising from Juul and other e-
cigarette makers.
\iv\ Higgin, Tanner. (October 4, 2019). ``How to Use the Vaping and
Juuling Trend to Teach Media Literacy,'' Common Sense Media.
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B. Companies' digital marketing practices are particularly problematic
for kids
1. Kids have trouble identifying and understanding ads--especially
online
Both child development experts and advertising professionals
recognize that children's cognitive abilities are not sufficient to
understand advertising the way adults do and that young people are a
vulnerable target group.v This is especially true online.
There are two cognitive processes needed to fully understand
advertising: the ability to distinguish between commercial and non
commercial content, and the ability to recognize the persuasive intent
of an ad while understanding the information in the ad is biased.
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\v\ Daems, K., De Pelsmacker, P., & Moons, I. (Nov. 17, 2017).
Advertisers' perceptions regarding the ethical appropriateness of new
advertising formats aimed at minors, Journal of Marketing
Communications.
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Research suggests children are not aware of advertisements until 4-
5 years of age.vi And over 75 percent of kids between 8-11
years old cannot distinguish advertising from other content.
vii Older children very often confuse Google search ads with
organic search results. When surveying kids 5-15 years of age, the UK
Office of Communications found that only 45 percent of 12--15 year olds
understood that the top search results in a google search had paid to
appear as such, despite being labeled with an orange box reading
``ad''.viii
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\vi\ American Psychological Association. (February 20, 2004).
Advertising and Children, http://www.apa.org/pubs/info/reports/
advertising-children
\vii\ Ofcom. (November 2016). Children and parents: Media Use and
Attitudes Report 2017.
\viii\ Ofcom. (November 20, 2015). Children and Parents: Media Use
and Attitudes Report 2015.; Shieber, Jonathan. (January 24, 2020).
Google backtracks on search results design, TechCrunch.
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Further, even when children can differentiate between sponsored and
non-sponsored content, they still have considerable trouble
understanding the ``selling intent'' of the ad. Children under 8 years
old lack the cognitive ability to understand the persuasive intent of
advertisements. Children ages 6-7 predominantly view advertisements as
informational programs that are used as ``a break for either the people
working on television or the viewers.'' ix Many older
children up to age 12 have trouble identifying and/or understanding the
commercial intent of an advertisement.x
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\ix\ Graff, Samantha, Dale Kunkel & Seth E. Mermin. (2012).
``Government Can Regulate Food Advertising to Children Because
Cognitive Research Shows that it is Inherently Misleading,'' Health
Affairs 2, 392-398.
\x\ Ofcom. (Nov. 2016). Children and parents: Media use and
attitudes report; Graff, S., Kunkel, D., & Mermin, S. E. (2012).
Government can regulate food advertising to children because cognitive
research shows that it is inherently misleading. Health Affairs 2, 392-
398; Valkenburg, P. M., & Cantor, J. (2001). ``The development of a
child into a consumer,'' Journal of Applied Developmental Psychology,
22(1), 61-72. https://doi.org/10.1016/S0193-3973(00)00066-6; Carter, O.
B. J., et al., (March 2011). ``Children's understanding of the selling
versus persuasive intent of junk food advertising: Implications for
regulation.'' Social Science & Medicine 72(6) 962-968.
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Online, children have even less understanding of advertising than
on television because the tactics used by companies are more implicit.
Several studies have found that children have ``lower awareness of
advertising on websites compared with television, and greater
difficulty recognizing it.'' xi As the American Academy of
Pediatrics has noted, even for those older children and teens who may
be able to recognize an advertisement, they ``often are not able to
resist it when it is embedded within trusted social networks,
encouraged by celebrity influencers, or delivered next to personalized
content.'' xii
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\xi\ American Psychological Association. (February 20, 2004).
Advertising and Children, http://www.apa.org/pubs/info/reports/
advertising-children
\xii\ American Academy of Pediatrics. (July 2020). Policy
Statement: Digital Advertising to Children, https://doi.org/10.1542/
peds.2020-1681.
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2. Marketing online implicitly and personally targets young people,
taking advantage of their credulity and lack of experience
Ads are pervasive in children's digital content. For example,
Common Sense research found advertising occurred in 95 percent of early
childhood videos on YouTube. Over one-third of videos in the early
childhood category contained three or more ads. xiii Another
study found that 96 percent of the most-downloaded free apps for
children under five on Google Play contained commercial content,
including hidden ads and automatically appearing pop up
ads.xiv
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\xiii\ Ad design in these videos was often problematic, such as
banner ads that blocked educational content, sidebar ads that could be
confused for recommended videos, or ads for video games that showed
doctored versions of popular characters, such as Peppa Pig. Radesky, J.
S., Schaller, A., Yeo, S. L., Weeks, H. M., & Robb, M.B. (2020). Young
kids and YouTube: How ads, toys, and games dominate viewing, 2020. San
Francisco, CA: Common Sense Media.
\xiv\ American Academy of Pediatrics. (July 2020). Policy
Statement: Digital Advertising to Children, https://doi.org/10.1542/
peds.2020-1681.
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Contemporary advertising does not explicitly persuade children, but
rather targets them implicitly, using enjoyable content to reach them
unconsciously. Online advertisements include precise behavioral and
location targeting, ``native ads'' where the content is the ad, viral
and social media marketing, advergaming, host selling and product
placement, and more. Further, children are often watching on their own,
so parents have no idea what products are being pushed on their
children, and children have even less hope of identifying
advertisements.
Highly personalized (and therefore persuasive). With
behavioral advertising, marketers and data brokers can create
dossiers of a young person's interests, fine-tuning sales
pitches to impressionable audiences. Most children do not
realize that ads can be customized to them or based on their
tracked activity, or that they see different ads than their
friends in the same game.xv As explained by the
American Academy of Pediatrics ``[p]revious online behaviors
shape what is delivered to users via news, notifications, and
social media feeds, creating a filter bubble in which all
input, unbeknownst to users, is tailored to their interests and
creates false norms that can undermine healthy behaviors.''
xvi
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\xv\ Anonymous. (May 8-13, 2021). ``They see you're a girl if you
pick a pink robot with a skirt'': How children conceptualize data
processing and digital privacy risks. In CHI '21: ACM CHI Conference on
Human Factors in Computing Systems; academics studying children's
interactions with apps have found that ``some thought everyone received
the same ads,'' or perhaps the same ads but not at the exact same time,
while some thought ``certain ads would be shown for the same video at
the same time, similar to TV ads.'' Zhao, J., Wang, G., Dally, C.,
Slovak, P., Childs, J. E., Van Kleek, M., & Shadbolt, N. (May 2019).
``I make up a silly name'': Understanding children's perception of
privacy risks online.'' CHI Conference on Human Factors in Computing
Systems Proceedings 2019, p. 2.
\xvi\ American Academy of Pediatrics. (July 2020). Policy
Statement: Digital Advertising to Children, https://doi.org/10.1542/
peds.2020-1681.
Indistinguishable from content. Native ads are
advertisements posing as articles, videos, or search results
that feature or highlight a brand, which has paid for the
production of the material as part of a marketing partnership
with the host website. In many cases, the content is the ad:
one study found that one third of posts on Instagram were ads,
while others have found undisclosed sponsored posts are
ubiquitous on the platform.xvii Common Sense
research has found that a third of children under age eight
report sometimes or regularly watching unboxing videos--
essentially program-length advertisements--on
YouTube.xviii The nine-year old multi-million dollar
star of many popular unboxing videos has faced consumer
complaints over failures to disclose paid product
placement.xix The lack of separation between
sponsored and non-sponsored content online can make it harder
for a child to distinguish an advertisement from
entertainment.xx
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\xvii\ Campaign for a Commercial-Free Childhood, et al., (April 15,
2021). Letter to Mark Zuckerberg to stop Instagram for children.
\xviii\ Rideout, Victoria. (October 19, 2017). Common Sense Census:
Media Use by Kids Age Zero to Eight, Common Sense Media.
\xix\ Hsu, Tiffany. (September 4, 2019). ``Popular YouTube Toy
Review Channel Accused of Blurring Lines for Ads,'' The New York Times.
\xx\ American Psychological Association. (February 20, 2004).
Advertising and Children, http://www.apa.org/pubs/info/reports/
advertising-children
Promoted by people kids trust--peers, celebrities, and
beloved characters. Marketers are quite effective at turning
kids themselves into spokespeople: teens may be unknowingly
conscripted into being product ambassadors, encouraged to
submit photos and share products and content with friends,
while young children are regularly prompted to share their game
progress on social media and to rate apps, which is effective
at commercializing friends.xxi Platforms use
``social proofing'' to show users that their friends are doing
or buying something, as this is effective at getting the user
to follow suit. Additionally, ``peers'' and celebrities
intentionally push products via unboxing videos and influencer
campaigns, host-selling in ways that would be prohibited on
television because they take advantage of a kid's special
relationship with a host or a character. Both children and
teens are not as critical as adults when seeing influencer
marketing, they have developed parasocial relationships and
view influencers and characters as credible, likeable, or even
inspirational.xxii
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\xxi\ Meyer M., Adkins V, Yuan N, et al., (January 2019).
``Advertising in Young Children's Apps: A Content Analysis,'' Journal
of Developmental and Behavioral Pediatrics: JDBP 40(1), p. 32-39. DOI:
10.1097/dbp.0000000000000622. PBS Frontline, (February 18, 2014),
Generation Like. [Video] http://www.pbs.org/wgbh/frontline/film/
generation-like/; See also Workgroup on Children's Online Privacy
Protection. (Dec. 30, 2013). Report to the Maryland General Assembly on
Children's Online Privacy 17.
\xxii\ Campbell, Margaret C. and Amna Kirmani. (June 2000).
``Consumers' Use of Persuasion Knowledge: The Effects of Accessibility
and Cognitive Capacity on Perceptions of an Influence Agent,'' Journal
of Consumer Research 27(1), p. 69-83. Richert, RA, Robb MB, Smith EI.
(2011). ``Media as social partners: the social nature of young
children's learning from screen media.'' Child Dev. 82(1), p. 82-95.
doi:10.1111/j.1467-8624.2010.01542.x.
Made into games. Advergames are used to entertain kids,
while slipping commercial content into their view and pairing
brands with the emotional experience of playing a game or
winning rewards. One study found only a quarter of children
were able to recognize an advergame. xxiii Children
under nine have shown lower conceptual and attitudinal
advertising literacy for advergames than traditional television
ads. xxiv And online games of all types push virtual
in-app purchases on players.
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\xxiii\ Soontae An, Hyun Seung Jin & Eun Hae Park. (2014).
``Children's Advertising Literacy for Advergames: Perception of the
Game as Advertising,'' Journal of Advertising 43(1), p. 63-72, DOI:
10.1080/00913367.2013.795123.
\xxiv\ Hudders, Liselot & Cauberghe, Verolien & Panic, Katarina.
(2015). ``How Advertising Literacy Training Affects Children's
Responses to Television Commercials versus Advergames,'' International
Journal of Advertising. 10.1080/02650487.2015.1090045.
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C. Online marketing causes real world harm for young people
Online promotions cause real world harm--in pushing unhealthy and
toxic products and behaviors and in supporting a culture of
surveillance and compulsive use. Studies demonstrate that ads quickly
affect kids' desires and purchase requests, leading to unhealthy
purchases and actions. According to the American Academy of Pediatrics,
ad exposure is associated with ``unhealthy behaviors, such as intake of
high-calorie, low-nutrient food and beverages; use of tobacco products
and electronic cigarettes; use of alcohol and marijuana . . .''
xxv (It is worth noting that even if parents or caregivers
deny requests, a harm still occurs: intra-family conflict when requests
precipitated by advertising are denied--older kids recognize the
injustice of this, reporting ``it's unfair to target kids with ads to
buy things. Kids/families might not be able to afford them.''
xxvi)
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\xxv\ American Academy of Pediatrics. (July 2020). Policy
Statement: Digital Advertising to Children, https://doi.org/10.1542/
peds.2020-1681.
\xxvi\ Data Protection Commission, (January 28, 2019) Know Your
Rights and Have Your Say! Stream Two of the DPC's Public Consultation
on the Processing of Children's Personal Data and the Rights of
Children as Data Subjects under the GDPR; (July 29,2019) ``Some stuff
you just want to keep private!''--Preliminary report on Stream II of
the DPC's consultation on the processing of children's personal data
and the rights of children as data subjects under the GDPR.
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The highly personalized nature of today's advertising exacerbates
these harms. Facebook--which recently announced new ad restrictions
toward teenagers--has gotten into hot water in the past when it was
revealed that employees had told advertisers they could identify when
teens and other young people were feeling ``stressed,'' ``defeated,''
``overwhelmed,'' ``anxious,'' ``nervous,'' ``stupid,'' ``silly,''
``useless,'' and ``a failure''.xxvii Kids who are anxious or
have low self-esteem do not need to be shown more dieting tips, offered
an energy drink pick-me-up, or be otherwise commercially manipulated.
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\xxvii\ Levin, S. (May 1, 2017). ``Facebook told advertisers it can
identify teens feeling 'insecure' and 'worthless'.'' The Guardian.
Unhealthy food and obesity. The relationship between food
advertisements and childhood obesity is well-documented. It has
been widely studied how promoting unhealthy food to children
directly impacts their dietary habits, and more recent research
has started to examine unhealthy food purveyors' use of digital
marketing.xxviii Food companies know how successful
targeting children is, and they pay big money to do it. Pepsi-
Co, CocaCola, and KFC have worked with Facebook to create
influencer campaigns to target youth.xxix They have
tapped popular multicultural influencers, compounding risks for
youth of color who have traditionally been more targeted with
unhealthy food and drink.xxx Research has found that
children viewing influencers pushing unhealthy snacks consumed
significantly more calories and unhealthy snacks than children
who watched influencers push non-food items.xxxi
Food marketers have also worked to incorporate their products
into videogames. Coca-Cola has created teen-directed mobile
games, enticing teens to participate with time based challenges
and rewards.xxxii Research shows increased caloric
intake in children playing advergames.xxxiii More
recently, food companies have woven their products into game
storylines, and even made products available for order and
delivery ``in the heat of the experience, promising instant
gratification and short circuiting conscious decision-
making''--simultaneously, marketers are adapting their products
to support digital gaming, pushing energy drinks as ``fuel''
and designing containers that can be opened without
interrupting the game.xxxiv
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\xxviii\ Common Sense. (2014). Advertising to Children and Teens:
Current Practices, 2014. Chester, J., K. Montgomery, and K. Kopp. (May
2021). Big Food, Big Tech, and the Global Childhood Obesity Pandemic,
Center for Digital Democracy.
\xxix\ PepsiCo, Coca-Cola, KFC, and other major brands have worked
closely with Facebook's creative team to develop influencer campaigns
aimed at young people.
\xxx\ Chester, J., K. Montgomery, and K. Kopp. (May 2021). Big
Food, Big Tech, and the Global Childhood Obesity Pandemic, Center for
Digital Democracy.
\xxxi\ American Academy of Pediatrics. (July 2020). Policy
Statement: Digital Advertising to Children, https://doi.org/10.1542/
peds.2020-1681.
\xxxii\ Common Sense. (2014). Advertising to Children and Teens:
Current Practices, 2014.
\xxxiii\ American Academy of Pediatrics. (July 2020). Policy
Statement: Digital Advertising to Children, https://doi.org/10.1542/
peds.2020-1681.
\xxxiv\ Chester, J., K. Montgomery, and K. Kopp. (May 2021). Big
Food, Big Tech, and the Global Childhood Obesity Pandemic, Center for
Digital Democracy.
Diet and self esteem. Digital advertising also pushes
unhealthy body images and diet products. According to Common
Sense research, teens who are active online worry a lot about
how they're perceived, and another study has found increased
time on Instagram is associated with an increase in eating
disorders.xxxv Social media can be especially
detrimental if teens are prone to comparing themselves to
images.xxxvi Diet products like detox teas claiming
to help users lose weight are being sold by major celebrities,
some of whom have been fined by the Federal Trade Commission
for making false or misleading claims about these products.
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\xxxv\ Common Sense Media. (January 20, 2015). Children, Teens,
Media, and Body Image. Turner, Pixie G. and Carmen E. Lefevre. (June
2017)``Instagram Use Is Linked to Increased Symptoms of Orthorexia
Nervosa,'' Eating and Weight Disorders: EWD 22(2), p. 277-84, https://
doi.org/10.1007/s40519-017-0364-2.
\xxxvi\ Kleemans M, Daalmans S, Carbaat I, Anschutz D. (2018).
``Picture perfect: the direct effect of manipulated Instagram photos on
body image in adolescent girls.'' Media Psychology 21(1), p. 93-110.
Vaping. Sales in e-cigarettes amongst middle school and high
school students increased dramatically when U.S. tobacco
companies began exploiting their online ads to
children.xxxvii Children who saw the ads were
significantly more likely to use the products. Internal company
documents from Juul revealed a targeted marketing strategy
toward kids, using ``copycat advertising'' to target young
customers and banner ads on child-oriented
websites.xxxviii Bright, flashy, and colorful, Juul
ads convinced young people that vaping was a trend with all the
``cool''-factor of cigarettes minus the health risks. Further,
Juul circumvented social media bans on paid tobacco advertising
by enlisting their own unpaid influencers to spread the product
across various platforms, influencing young teens with
celebrity endorsements. According to Common Sense research,
advertisements of vaping-related content are common (61 percent
of teens report seeing them), as are content shared by friends
(40 percent of teens) and celebrities, personalities, and
influencers (25 percent of teens). Over half of teens say
they're likely to see a social post that mentions or shows
vaping, and roughly three-quarters of Snapchat and Instagram
users report such posts.xxxix
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\xxxvii\ Rapaport, Lisa. (April 2016). ``Teens Most Drawn to E
Cigarettes by Online Ads,'' Reuters Health Report.
\xxxviii\ Turner, T. (March 10, 2020). How Juul Created A Teen
Vaping Epidemic, Drugwatch
\xxxix\ Common Sense. (2019). Vaping and Teens: Key Findings and
Toplines. Common Sense Media and SurveyMonkey.
Alcohol, Drugs, and Adult Activities. Research demonstrates
a connection between exposure to alcohol and marijuana ads and
consumption of these products by young people. Such products
are advertised via social media and video, and ads appear
disproportionately in communities of color.xl In
addition, rules meant to limit what products young people can
purchase are less effective than in physical retailers.
Ineffective purchasing gates, such as simply stating in a Terms
of Use that a user must be 18, have, for example, allowed
children to purchase weapons from Amazon.xli And
social media companies provide markets for teenagers to find
illegal goods, like drugs.xlii What's more, kids may
be profiled with interests in gambling or drinking--Facebook,
for example, had categorized hundreds of thousands of kids as
``interested in'' gambling and/or alcohol, and at one point was
allowing researchers to target such teens with ads featuring
poker chips or drinks.xliii
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\xl\ American Academy of Pediatrics. (July 2020). Policy Statement:
Digital Advertising to Children, https://doi.org/10.1542/peds.2020-
1681.
\xli\ The Parent's Accountability and Child Protection Act,
(September 2018). A California 14 year old purchased a BB gun, throwing
knives, and a hunting knife on Amazon without his parent's knowledge.
\xlii\ Abrahamson, Rachel Paula. (February 8, 2021). ``Mom warns
about drug dealers on Snapchat after son, 16, dies from overdose,''
Today Show.
\xliii\ Hern, A., and Ledegaard, F. H. (Oct. 9, 2019). ``Children
'interested in' gambling and alcohol, according to Facebook.'' The
Guardian.
Virtual products and confusing currency. Marketing of
virtual in-game items and lootboxes is also a big problem.
Young and pre-literate children are directly encouraged to
spend money within apps and games, and teen apps in particular
are highly monetized--one study found teen apps are over three
times more likely to support in-app purchases than general
audience apps.xliv Often, the fact that a purchase
involves actual money is not made clear to kids, who believe
their activities have no ``real world'' consequences and do not
realize they are spending their parents' money. And kids have
spent hundreds and thousands of dollars, collectively totalling
millions. Lootboxes contribute to this problem by game-ifying
the purchase and randomizing the product received. Almost all
the biggest tech companies have settled with the Federal Trade
Commission over unfairly permitting minors to make in-app
purchases when it was not clear a purchase was being made and
when parents were not given a choice whether to allow the
purchases.
---------------------------------------------------------------------------
\xliv\ BBB National Programs. (October 2020). Risky Business: A New
Study Assessing Teen Privacy in Mobile Apps.
Surveillance. Children themselves do not appreciate the
surveillance that accompanies highly personalized ads--when
they understand how targeted ads work, teens and older kids
repeatedly describe them as ``creepy,'' ``distracting and
irritating'', saying ``[i]t feels like they're stalking you.''
xlv The constant profiling that accompanies
behavioral ad targeting, and targeted ads themselves, do a
disservice to kids by potentially labeling and limiting them.
Young people's choices and their autonomy may be constrained
and shaped by coercive techniques that only show them certain
opportunities but not others--as with, for example, women being
shown fewer prestigious job offers in search results
xlvi--and by algorithmic profiling that builds in
bias when determining whether to, say, admit students into
educational programs.xlvii This can cause young
people to limit themselves too. When kids know all their
activities are being monitored by surveillance technologies,
research shows they are less likely to engage in critical
thinking, political activity, or questioning of
authority.xlviii
---------------------------------------------------------------------------
\xlv\ Data Protection Commission, (January 28, 2019) Know Your
Rights and Have Your Say! Stream Two of the DPC's Public Consultation
on the Processing of Children's Personal Data and the Rights of
Children as Data Subjects under the GDPR; (July 29,2019) ``Some stuff
you just want to keep private!''--Preliminary report on Stream II of
the DPC's consultation on the processing of children's personal data
and the rights of children as data subjects under the GDPR.
\xlvi\ Gibbs, S. (July 8, 2015). ``Women less likely to be shown
ads for high-paid jobs on Google, study shows,'' The Guardian.
\xlvii\ Richardson, R., & Miller, M. L. (Jan. 13, 2021). ``The
higher education industry is embracing predatory and discriminatory
student data practices,'' Slate.
\xlviii\ Brown, D. H., & Pecora, N. (2014). ``Online data privacy
as a children's media right: Toward global policy principles,'' Journal
of Children and Media, 8(2), p. 201-207.
Compulsive Usage. Compulsive online use is also a problem
many families struggle to address. Design techniques including
ads that push more digital content, such as by offering rewards
in exchange for ad viewing, are a culprit. And such ads appear
for even the youngest users--in popular Google Play apps for
children under five, children were offered ads to view in
exchange for game tokens or making advancement in a game
easier.xlix This type of manipulative marketing can
keep kids stuck in a never ending loop.
---------------------------------------------------------------------------
\xlix\ Meyer M, Adkins V, Yuan N, Weeks HM, Chang YJ, Radesky J.
(January 2019). ``Advertising in young children's apps: A content
analysis,'' Journal of Developmental & Behavioral Pediatrics. 40(1), p.
32-9. American Academy of Pediatrics. (July 2020). Policy Statement:
Digital Advertising to Children, https://doi.org/10.1542/peds.2020-
1681.
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D. Kids and families deserve better
Our legislative and regulatory landscape has not kept pace with
marketing techniques. Practices that would be prohibited on television
and traditional media run rampant online. Updated and effective
safeguards are desperately needed.
First and foremost, Congress and the Administration should ensure
that the Federal Trade Commission is equipped with adequate resources
and enforcement authority to police unfair and deceptive marketing--
including practices that violate current FTC Endorsement guidelines.
But the Commission also needs greater resources and support to
strengthen the endorsement guidelines, and outline what practices are
specifically not allow for children and teens (such as endorsements for
unhealthy food and drink).l Common Sense and other groups
recently urged Congress to significantly increase appropriations and
staffing for the FTC.
---------------------------------------------------------------------------
\l\ Fox Johnson, Ariel. (June 22, 2020). Comments to the Federal
Trade Commission on Guides Concerning the Use of Endorsements and
Testimonials in Advertising, Common Sense Media,
---------------------------------------------------------------------------
Congress should also pass a Children's Television Act for the
Internet age, and a model exists: the Kids Internet Design and Safety
or KIDS Act.li Among other things, it would limit kids'
exposure to marketing and commercialization by creating rules that
would prevent sites from recommending content that includes host-
selling or influencer marketing, or that involves nicotine, tobacco, or
alcohol.
---------------------------------------------------------------------------
\li\ S. 3411, Kids Internet Design and Safety (KIDS) Act, (March 5,
2020).
---------------------------------------------------------------------------
And Congress cannot continue to delay in enacting meaningful
privacy protections, especially for children and teens. In the
marketing context, behavioral advertising to children and teens should
be prohibited. The recently introduced bi-partisan COPPA update, the
Children and Teens Online Privacy Protection Act, would ban behavioral
ad targeting to children and enact a Digital Marketing Bill of Rights
for Teens.lii The PRIVCY Act, liii introduced
just last week in the House, would ban behavioral ad targeting to all
children and teens. These two privacy bills are excellent models that
would start to curb commercial surveillance business practices and also
beef up Federal Trade Commission enforcement and powers.
---------------------------------------------------------------------------
\lii\ S. 1628, Children and Teens' Online Privacy Protection Act,
(May 13, 2021).
\liii\ H. 4801, Protecting the Information of our Vulnerable
Children and Youth (Kids PRIVCY) Act, (July 29, 2021).
---------------------------------------------------------------------------
And, while the current research already shows much to be concerned
about, as marketing techniques advance ever more, independently-funded
research struggles to keep up. So as to stop playing catch up with the
industry, we must better understand the relationships between digital
media use and early and adolescent development. Congress could advance
this by passing and funding the bi-partisan and bi-cameral Children and
Media Research Advancement Act (CAMRA).liv
---------------------------------------------------------------------------
\liv\ S. 971, Children and Media Research Advancement (CAMRA) Act,
(March 25, 2021).
---------------------------------------------------------------------------
The challenges posed by online marketing to children is not unique
to the United States, of course. Congress can find international
examples of best practices with respect to children and advertising.
Many countries in Europe prohibit advertising and other practices that
take advantage of a child's age or credulity. And the UK recently
proposed major restrictions regarding online advertising of junk food.
The U.S. would do well to follow suit.lv
---------------------------------------------------------------------------
\lv\ Steyer, Jim. (May 20, 2021). ``The U.S. needs to take a page
out of the UK's food advertising book,'' The Sunday Times.
---------------------------------------------------------------------------
Conclusion
Thank you again for your commitment to understanding how deceptive
digital marketing practices can cause real harm to kids. Your attention
to these issues is critical for the health and well-being of all
children, and your support for new legislative and regulatory tools
will be particularly important to make a real difference for the way
our children grow up in on online world.
Senator Blumenthal. Thank you very much, Ms. Johnson. I am
told that Commissioner Ohlhausen's audio has been interrupted,
and so we are going to move to questioning and hope that her
connection is restored. Let me begin by recalling I think the
reference that Attorney General Stein made to these products,
characterizing them as slick, and they are indeed slick. They
are not only dangerous, but they are slickly presented, and I
am sure all of us have seen them before. I have been smelling
this strawberry flavored one and it is very alluring. But not
only is the pitch made with sleekness and physical
attractiveness, but also it involves a health benefits pitch.
And in some ways, that is the most pernicious part of their
promotional activity. They are directly soliciting people on
the basis that there are health benefits to this product, and I
think you can see the suggestion in the Blu advertisement
behind me. This ad goes even further to make the really
despicable claim that, ``no one likes a quitter, switch
today.'' Philip Morris International has attempted to rebrand
launching the foundation for a smoke free world, as it did in
2017, all the while rolling out new products like their
recently heated product.
Obviously, claims related to health benefits or cessation
are totally unsubstantiated, but they sought to provide a
veneer of substantiation by, in effect, buying an issue of a
journal, the American Journal of Health Behavior, with 11 peer
reviewed studies. They failed to mention in their public
release that the company who conducted this research was
always--also paid to do so by Juul with the goal of providing
that, ``research in support of,'' Juul's product review at the
FDA. I am not sure whether they told the FDA about it. I doubt
it. But essentially they are using the same deceptive practices
on the FDA that it has used on teens and the public.
Dr. Jackler, you spoke to these cessation claims in your
testimony. Can you share how effective these kinds of pitches
are for current smokers?
Dr. Jackler. So I care very much about adult smokers, and I
would love to help them to either quit their product, which is
best, or to transition to something that is less harmful to
them. Unfortunately, it is very difficult to cure addiction.
And e-cigarettes are probably a little bit better than patches
and gums, the data would show. Data independent of the tobacco
industry routinely shows maybe 5 or 6 percent with traditional
nicotine replacement, and maybe as much as 8 or 10 percent with
electronic cigarettes.
The only studies that are highly optimistic are those that
were sponsored by the tobacco company that have commercial
conflicts of interest, that are trying to make a point to
support their narrative. You have to counterbalance this,
however, with the phenomenon of dual use. If you are a smoker,
there are many places you can't smoke today, can't smoke at a
restaurant or a bar or your workplace. And what people are
doing is they are filling in the gaps in nicotine use by using
other products like e-cigarettes. And what happens is, you
know, you go to the airport, you can't smoke, you can't smoke
on the plane, you can't smoke waiting for the bag. That is many
hours. That helps people to imagine a world without nicotine
exposure and not.
So what the people do is they fill in the gaps with e-
cigarettes and actually raise and sustain and deepen their
addiction. So although there are some benefits to adult
smokers--and you have to realize most adult smokers want to
quit and have tried many times but have not been able to
succeed. Well, the advertisers are very clever. They know if
they say, use this to quit smoking. It is a drug under the FDA
rules. So they say, why quit? We didn't say quit. They say, why
quit? Switch alternative.
But, you know, smart advertisers can say cessation without
ever saying it. For example, take an ad that says it worked for
me. Well, any consumer knows what that means. A lawyer may
argue it doesn't say it, but it does. Or plan A with an x
through it and plan B. So there are so many ways to communicate
that the products intended to substitute for cigarettes, and
contravene the rules of the FDA, which says you cannot do that
without being a drug and approved.
Senator Blumenthal. And all of these pitches have nothing
to do with children who have never smoked and therefore are not
trying to switch or quit in any way. The appeal to them
essentially is to lure them into lifetimes of addiction, and
smoking eventually, and disease.
Attorney General Stein, in your consent judgment against
Juul, you specifically barred Juul from making any comparison
to cigarettes or any therapeutic claims like cessation claims
about their products in their advertising. How do you think
these claims influence North Carolina's smokers and non-smokers
in their decision to use Juul?
I am hoping we still have Attorney General Stein. OK. I
guess we have no remote witnesses at the moment. So let me
ask----
Mr. Stein. Senator Blumenthal, can you hear me?
Senator Blumenthal. I can hear you.
Mr. Stein. Can you all hear me?
Senator Blumenthal. Yup, go ahead. You are back. Thank you.
Ms. Ohlhausen. I can hear you.
Mr. Stein. I couldn't hear--can you hear me, Senator
Blumenthal? I know that----
Senator Blackburn. Yes, we can hear.
Senator Blumenthal. We can hear, I think both of you
actually. Attorney General Stein, can you hear me?
Mr. Stein. Yes, that was not part of--that was not part
of--we are on a terrible delay, so I will try to approach the
answer. That was not part of our lawsuit. Our lawsuit focused
on Juul's marketing, which we believed induced young people to
become addicted. So we did not engage in an extensive discovery
on the issue of their health claims.
Senator Blumenthal. I will go back now to Dr. Jackler and
ask you one more question. You met with Juul's founders, Adam
Bowen and James Monsees, regarding their interest in tobacco
advertising. What do you think the company's founders took away
from their meeting with you?
Dr. Jackler. Yes. I met with Mr. Monsees at Juul
headquarters and had a two-hour long conversation with him. One
of the first things he said is, you know, thank you so much for
that wonderful database that you supply online of the history
of tobacco advertising. He explained and has explained many
times that there were very good students of the practices of
the tobacco industry. And when we studied Juul advertising, we
can see exactly what Mr. Monsees said, which is it was
inspirational and helpful to him and to his team of creatives
that created Juul marketing. There are many similarities
between what Juul uses to market and the way the tobacco
industry traditionally, particularly in its advertising toward
underage children.
Senator Blumenthal. Thank you. I might just say that the ad
that we displayed, which had the Joe Camel image certainly
indicated the similarities, and also the set of slides that you
put up showing the colors and images substantiated it. And the
history of Big Tobacco certainly indicates that it glamorized
these products using those images. I will turn to the Ranking
Member.
Senator Blackburn. Thank you, Mr. Chairman. And to General
Stein, we will ask you for a question--a written response. What
I would like for you to submit to the committee is, in your
preparation for the lawsuit on the marketing, where did most
teens learn about e-cigarettes and become drawn to them? I
would like to know if it was through friends, the vape store,
online. But you can submit that in writing since we have audio
issues.
Ms. Fox Johnson, to you, the filter bubble. This is
something we had legislation on last year dealing with the
filter bubble. Chairman Blumenthal and I both sponsored the
Transparency Act, which would require big tech companies to
give consumers the option to see content outside that curated
bubble. We know from the American Academy of Pediatrics that
this filter bubble is particularly dangerous for children.
So I would love for you to talk about the filter bubble for
just a second, why kids need to see something that is outside
of their curated bubble, and if you think that parents, and
some grandparents and parents, have the tools that they need to
keep kids from harmful algorithms and tailored ads?
Ms. Johnson. Sure, thank you, Senator Blackburn, and thank
you for your bipartisan leadership on this issue. I was excited
to see so many co-authors of the Filter Bubble Act are on the
subcommittee. Think secret algorithms determining what content
and advertising children see and what filters they will be
placed in are a huge problem. This is happening unbeknownst to
kids. This is happening unbeknownst to parents.
In all other aspects of our children's lives, we encourage
them to try new things, to learn about different cultures, to
learn about different experiences, figure out what they like.
And we try not to label and limit them and sort of determine--
predetermine what their reality will be. But that is exactly
what a filter bubble does. So I think it is excellent to have
more transparency and to ensure that there are unfiltered
options.
And ideally, companies would take it upon themselves to
offer particularly vulnerable young users an unfiltered
experience by default. You wanted to know about parental
controls with respect to advertising or algorithms. Right now,
there really aren't that many parental controls with respect to
advertising or algorithms. You can try to keep your kid from
seeing certain, you know, inappropriate content or websites,
but if you want to block them from seeing ads, you just have to
stop them from looking at devices or sites and services in the
first place.
There is really--if you turn on too many ad blockers, which
are not parental controls, just general ad blockers, oftentimes
these sites and services won't work. So this is not something
that parents or grandparents can take into their own hands
right now.
Senator Blackburn. When we look, and you mentioned the
settlement that YouTube paid to the FTC, and for collecting
data on children without the parents' consent--and the way
YouTube shows ads to little kids, to me, this is something that
is disgusting. And I would love to hear from you what policies
you think Congress should move forward with in protecting
children?
And then likewise, when it comes to COPPA, which needs to
be reviewed and rewritten, what are insertions or changes that
could be made there? And Commissioner Ohlhausen, and I know
that you--we will send this one to you in writing, what you
think we should do in revisiting COPPA and updating that. Go
ahead, Ms. Johnson.
Ms. Johnson. Thank you, Senator Blackburn. So, yes, YouTube
settled with the FTC because it was collecting information from
watchers of child nursery rhyme and other child directed
content videos and using that information to serve up
behaviorally targeted advertisements to children and sort of
determine what future content might be attractive and increase
profits that way. This settlement highlighted a lot of ways
that we could improve the landscape for kids' privacy.
First, for years YouTube was able to say, no, we don't have
actual knowledge that these are children watching these videos.
So one thing to do is to make very clear that COPPA covers all
sites and services that children are using and that we don't
need to have to narrow a standard and companies can't turn a
blind eye to kids. We should also improve privacy by protecting
teenagers, especially young teenagers.
Another thing Congress could do is confirm what the FTC has
decided in its current rule that personal information needs to
be defined broadly and include persistent identifiers. This was
not something that was considered personal information back in
the 90s when COPPA was passed. But most modern privacy
proposals do consider it now. We also need stronger enforcement
and real penalties.
State Attorney Generals should be able to get penalties
just like the FTC can when they are enforcing COPPA and there
should be minimum penalties. We need penalties that are
sufficient to deter bad actors, so they don't profit and see
this as a cost of doing business or a slap on the wrist. We
also need to give the FTC more resources.
Common Sense and other advocates have asked for a 50
percent boost in resources. They are trying to keep up, but
they do struggle when faced with big tech.
Senator Blackburn. Excellent. That is helpful. I am over my
time. I would like to hear from you--you can submit this in
writing. You mentioned the ads that give you tokens for games,
things of that nature. And as we look at the entertainment
software, I would love to know who has engaged in that. And,
Mr. Chairman, with that, I will yield back.
Senator Blumenthal. Thanks so much, Senator Blackburn.
Senator Lee.
STATEMENT OF HON. MIKE LEE,
U.S. SENATOR FROM UTAH
Senator Lee. Thank you, Mr. Chairman. Ms. Johnson, I would
like to start with you if possible. I have long been concerned
about how various companies operating online are targeting
adult themed ads to children, sometimes to young children, but
in many, many instances to minors in one way or another. In
your research, what can you tell me about the sexually explicit
or adult themed advertisements that are targeted to children,
and about what harms the children experience as a result of
those?
Ms. Johnson. Sure, thank you, Senator. So as you mentioned,
children, teens, older children, tweens, everyone is seeing and
content in ads that are age inappropriate. And in a Common
Sense study looking at YouTube, for example, they saw that for
videos viewed by children under eight, one in five contained
ads that were not age appropriate, including sexual content,
you know, benign things like ads for lingerie or something less
benign. If you think that is benign for a 5-year old. It is
pretty common for older tweens and teens to also come across
sexual content.
A recent study came out where users identified as around 13
years old and were almost immediately, especially if they were
boys, targeted with what appeared to be sort of escort services
and ads. This is a real problem, however it is happening.
Parents often don't know that these things are happening. Kids
are watching on small screens, they are watching in their
bedrooms. It is not everyone watching together in the family
television.
So parents aren't there to know what is going on and to
help stop it. As discussed with Senator Blackburn, they are
often not ways to filter through these things or to turn them
off. And kids and teens are getting exposed to more content
than many of us would like them to at a very young age.
Senator Lee. Aside from--outside the context of COPPA, is
there anything you think we ought to focus on--that we could do
about it?
Ms. Johnson. Sure, I think that we should also pass sort of
a children's television act for the digital age, like the KIDS
Act, which Senator Markey and Blumenthal introduced last year,
and that would create some advertising and some content rules
around content and address sort of compulsive aspects and
manipulate design in games. I also think we need more research
into how media and tech are affecting kids, all kinds of
things. And for that, we would love to point to the bipartisan
Camera Act, which would support NIH funded research.
Senator Lee. Thank you. That is helpful. There have been
countless stories about how the various platforms, including
YouTube, Snapchat, Facebook, Instagram, and so forth can end up
facilitating child exploitation and also provide easy access to
child pornography. Each of these platforms have an app
available through the Apple App Store and the Google Play
store.
And those stores, in turn, have age ratings to help guide
consumers to age appropriate content. But why is it--why is it
that there is sometimes such a disparity between the App's
rating and the content that may be available on that platform?
Ms. Johnson. That is an excellent question, Senator, and
one that is probably best directed to the platforms or the
content creators themselves. It is something that we have
struggled with for video games also and with apps that they
will have one age rating and they will have a different privacy
age rating and then they will have a different content rating.
And it is pretty opaque, like a lot of the tech practices. And
it is certainly something that for parents who are trying to
pick something for their kids, they would be much helped by
having at least one single reliable rating.
Senator Lee. Right. Yes, it is interesting when I have had
this conversation with many of the people running some of these
businesses, very often their answer is similar to yours. Now,
in your case, you don't run them. You are on the outside trying
to make a difference.
For those companies that are actually running them, I find
the answer less than satisfying. What do you think we ought to
consider? Is that something we ought to look at as a Congress
in figuring out whether there are ways to ensure the
transparency of the operating system and provide some clarity
on the content that may be available for those platforms, and
whether it is consistent with the age appropriateness rating?
Ms. Johnson. I think that is definitely something to look
at. I think the platforms and app stores play a huge gatekeeper
role in determining what can be shown and how it is going to be
pushed on families and sold to different audiences. And so if
there was a--it is not fair to put something in the designed
for families section of the Google Play store if it is not
actually designed for families, for example, in Common Sense's
opinion or a similar story on Apple.
So if we could get gatekeepers to come together and agree
on some basic standards and communicate those transparently,
that would be very helpful. They also need to clean up the
underlying practices, but transparency is great too.
Senator Lee. Great. Thank you. Mr. Chairman, I see my time
has expired. I did have some additional questions I wanted to
ask to Commissioner Ohlhausen but given the time and the
communications hiccups that we have got, I will submit those
for the record.
Senator Blumenthal. Thanks very much, Senator Lee. We are
still hoping that maybe we will correct the technical failure,
but I think submitting them in writing, and I have some as
well. I have a few more questions, so maybe we will do a second
round. When we planned this hearing, we did not expect to be in
the middle of the infrastructure votes and a lot else that is
going on. So colleagues are very busy this afternoon, but I
wanted to come back to the social media issue because social
media is such a powerful tool. Juul knew it, and so they paid
online influencers and celebrities to message the coolness
factor of Juul in a very personalized way.
In 2015, they posted on their websites looking for
candidates to fill intern positions that would liaison with
social media and influencers and celebrities, and an
application on their portal for those looking to join the Juul
influencers, as they put it, ``join the Juul influencers'' and
receive compensation. They also began tagging their own images
and those of their influencers on social media with a multitude
of hashtags related to Juul like #juullife, #juulvapor,
#vapourised, #join, and they tagged their posts with those
seemingly innocuous hashtags.
#technology, #art, to expand their brand's reach. They were
ingenious and innovative in the use of social media so that
kids weren't just Juuling, they were, ``hashtag Juuling.'' And
I want to show one of those influencers here. This visual is of
an influencer who was paid $1,000 to post about Juul. She has
since publicly spoken about her experience working with the
company.
And I would like to ask you, Dr. Jackler, you cited a 2019
report on Juul's advertising. The company's own social media
consultants address the strength of this strategy in a case
study submitted to Juul. And they said, ``we created ridiculous
enthusiasm for the hashtag vaporized, and deployed rich
experiential activations and brand of sponsorship strategy that
align perfectly with those we knew would be our best
customers.''
I suppose their words speak for themselves. But as you have
laid out, and you shared in your research, what was the result
of this hashtag campaign? Was it effective? Did it have the
impact that they thought it would? And I am going to ask Dr.
Johnson more or less the same question, so go ahead.
Dr. Jackler. You know, Juul saw itself as a technology
company. It was, in fact, of course, a tobacco company, but it
saw itself as a technology company. But because it was selling
nicotine, the tobacco product, it couldn't pay for ads on
Facebook or Instagram or YouTube, but instead they set about to
do it for free or so-called organic marketing. They created
their own channels. They created their own identities. And they
wanted what they termed digital domination. They really saw the
modern way to do it.
And so one of the key differences in the advertising of
Juul and Marlboro, for example, they looked very similar in
many ways in terms of the content of the ads, if you look at
them side by side, but the channels they use were different. So
the traditional tobacco ads, TV, radio, magazines and
newspapers, right. But Juul did it through social media. Why?
First, as a startup, it couldn't afford to advertise--and it
could advertise on TV because of a loophole, and e-cigarette
brands do advertise on TV, in fact. And Juul did advertise on
radio, but in fact, that is expensive. So instead, they just
did it for free on social media and they did it in an enormous
impact.
So much so that they triggered what is called viral
marketing. Viral marketing is to get your customers or even
people that see your ads to talk about it and to get word of
mouth, so-called electronic word of mouth. And it goes out in
spheres beyond that and amplifies and eventually it becomes a
fad. And Juul became a huge fad, the must do thing among
teenagers in America. And that after a while, Juul could turn
off its social media when it was under intense regulatory
scrutiny.
And Scott Gottlieb at the FDA was calling them in and
writing them harsh letters about the social media. Juul said,
we are going to be fine now. They turned it off. But what teens
most listened to are other teens. And social media chatter
around Juul, it became the thing. So #juul, which is a huge
amplifier of its Instagram and other accounts, teens would post
up things not only about vaping or tobacco use, but it became
the place to be. It was the home for teens. Many industries
would like to have such a viral fad, like pet rocks or hula
hoops, were in the day. Juul accomplished it and it was by
engineering and by design. It was not an accident and they
succeeded beyond their wildest dreams.
But once they saw what was happening in the social media
sphere and the huge interest in Juul by teens, they took no
action to inhibit it. Only until parents all over America rose
up, and again, we started to see action by regulators against
them. Then they said, OK, but it was too late at that point
because it is like you push a boulder downhill, it goes faster
and faster and at a certain point it is out of your control.
And they had plenty of things they could have done from the
beginning in their design.
And at many times there were circuit breakers they could
have put in. But the money was rolling in and they had a choice
between the well-being of the youth of America or windfall
profits and a valuation that approach $30 billion for a few
year startup. And they chose the money over concern over their
customers.
Senator Blumenthal. Thank you. Ms. Johnson.
Ms. Johnson. Thank you. Sort of similar things as to teens
are particularly susceptible to influencer marketing. They
often don't realize that influencers are paid. Influencers
don't appropriately disclose that they are being paid. Teens
are at a place where they are looking to peers and others to
define themselves. They want to fit in. They want to do what
other people are doing. This is why platforms social proof
their products.
And teens have developed para-social relationships, one
sided relationships where they feel uniquely connected to an
influencer. So this is someone that they trust, they respect,
they admire, they aspire to be like that person. So whatever
they are seeing an influencer do online, they are particularly
receptive to it and to doing it themselves.
Senator Blumenthal. Thank you. Evidently, we now have both
former Chairman Ohlhausen and Attorney General Stein connected
again. Ms. Ohlhausen, maybe we could turn to you for your
opening statement. Then I am going to go to Senator Markey for
his questions.
STATEMENT OF MAUREEN OHLHAUSEN, FORMER ACTING CHAIR, FEDERAL
TRADE COMMISSION
Ms. Ohlhausen. Great. Thank you. I would like to thank
subcommittee Chairman Blumenthal, Ranking Member Blackburn, and
the members of the Subcommittee for inviting me to testify at
this hearing on toxic marketing claims and their dangers. It is
my hope that I can offer some helpful perspective as Former
Acting Chairman and Commissioner of the Federal Trade
Commission and a longtime consumer protection practitioner. In
its consumer protection mission, the FTC enforces laws that
prohibit business practices that are unfair or deceptive to
consumers.
The Commission defines deceptive advertising practices as
those involving a material representation, omission, or
practice that is likely to mislead a consumer acting reasonably
in the circumstances. And an actor's practice is unfair if it
causes or is likely to cause substantial injury to consumers,
which is not reasonably avoidable by the consumers themselves
and not outweighed by countervailing benefits to consumers or
competition. The FTC general rules relating to advertising are
fairly straightforward.
First, marketers must not mislead consumers. And second,
claims made about product attributes must be substantiated
before they are made. In addition, marketers must avoid
advertising that causes substantial injury that a consumer
cannot avoid, such as by following clear and prominent warnings
and disclosures. So I will expand briefly on some of the
concepts that underlie these general requirements. First, the
Commission reviews advertising from the perspective of a
reasonable consumer in the target group. For example, for
advertising to children, the FTC will review the ad from the
perspective of a reasonable child.
Second, the Commission is concerned about both express and
implied claims made in ads, including claims that relate to
safety. Third, some advertising may be interpreted in a variety
of ways. If a deceptive interpretation is a reasonable one, the
company may be held liable.
Finally, an advertiser can deceive a consumer by what it
doesn't say as well as what it does say, and if they omit
information that is material in light of the representations
made in the ad, then that ad is deceptive. Under the FTC's
advertising substantiation policy, every objective product
claim, whether express or implied, must be supported by
evidence providing a reasonable basis for the claim. If the
entity makes a safety claim in its advertising, that safety
claim must be supported by evidence.
And in some cases, an advertiser may be required to possess
clinical testing or other scientific evidence that
substantiates the claim. So as for unfairness, as already
noted, an unfair act or practice is one that causes substantial
injury, consumer injury that is not reasonably avoidable, and
it is not outweighed by any countervailing benefits to
consumers or competition. And with respect to unfair
advertising, the classic example was the promotion of razor
blades by placing the products themselves in the comics section
of the Sunday paper. And the Commission alleged that this
practice created a substantial and unjustified risk of injury
to children.
So certain products may be safe or legal for adults, but
not children. And the FTC has used its unfairness authority to
bring enforcement actions where such products are marketed to
children. So I would like to finish my testimony with the
discussion of an FTC action during my tenure involving the
marketing of nicotine products in an unsafe manner. So, as
previously mentioned, the FTC's law enforcement activities
involving tobacco advertising date back to the 1930s.
And the Commission also publishes periodic reports on
promotion activities in the cigarette and smokeless tobacco
industries. And it recently announced that it would begin
collecting such information for e-cigarettes. And near the end
of my tenure as Acting Chairman, the FTC, jointly with the FDA,
so it was myself and Dr. Gottlieb, issued warning letters to
manufacturers, distributors, and retailers for selling e-
liquids used in e-cigarettes with labeling and advertising that
resembled kid friendly food products such as juice boxes,
candies, or cookies, and some of them with cartoon like
imagery.
And several of these companies were also cited for
illegally selling those products to minors. And given the
serious risk of child poisonings due to ingestion of liquid
nicotine, we stated that marketing these products and packaging
that is likely to be particularly appealing to young children
could present an unwarranted risk to health or safety and could
thus be an unfair advertising practice under the FTC Act.
So thank you for the opportunity to discuss how my former
agency has long used its authority to challenge deceptive and
unfair marketing claims that raise health and safety issues,
particularly for children. And I look forward to your
questions.
[The prepared statement of Ms. Ohlhausen follows:]
Prepared Statement of Maureen K. Ohlhausen, Partner, Baker Botts L.L.P.
Introduction
I would like to thank Subcommittee Chairman Blumenthal, Ranking
Member Blackburn, and the members of the Subcommittee for inviting me
to testify at this hearing on Toxic Marketing Claims and their Dangers.
I commend you for examining these issues that affect American consumers
and the interests of U.S. businesses. It is my hope that I can offer
some helpful perspective, as former Acting Chairman and Commissioner of
the Federal Trade Commission and a longtime consumer protection
practitioner, that will assist the Committee with this important
effort.
The FTC is a highly productive, independent agency with a broad
mission to both protect consumers and maintain competition in most
sectors of the economy. In fulfilling its consumer protection mission,
the agency enforces laws that prohibit business practices that are
unfair or deceptive to consumers, being mindful not to impede
legitimate business activity. Deceptive practices are defined in the
Commission's Policy Statement on Deception \1\ as involving a material
representation, omission or practice that is likely to mislead a
consumer acting reasonably in the circumstances. An act or practice is
``unfair'' if it ``causes or is likely to cause substantial injury to
consumers which is not reasonably avoidable by consumers themselves and
not outweighed by countervailing benefits to consumers or to
competition.'' \2\ The Subcommittee may find it interesting that the
FTC's Unfairness Policy statement was developed in a proceeding
involving a product, tractors, that could be dangerous if operated
without certain precautions.\3\
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\1\ FED. TRADE COMM'N, FTC POLICY STATEMENT ON DECEPTION (1983),
appended to Cliffdale Associates, Inc., 103 F.T.C. 110, 174 (1984),
https://www.ftc.gov/system/files/documents/public_statements/410531/
831014deceptionstmt.pdf.
\2\ 15 U.S.C. Sec. 45(n).
\3\ FED. TRADE COMM'N., COMMISSION STATEMENT OF POLICY ON THE SCOPE
OF THE CONSUMER UNFAIRNESS JURISDICTION (1980) appended to Int'l
Harvester Co., 104 F.T.C. 949, 1070 (1984), https://www.ftc.gov/public-
statements/1980/12/ftc-policy-statement-unfairness. In the case, the
Commission found that the defendant's failure to disclose to customers
the risk of fuel geysering in tractors was unfair under Section 5 of
the FTC Act and required the defendant to provide prominent notice to
tractor purchasers about these risks.
---------------------------------------------------------------------------
As part of the its authority to stop deceptive and unfair
practices, the Commission oversees national advertising of a wide
variety of products in a wide variety of formats, including online,
television, print, and radio advertising, as well as a product's
labeling and packaging, point of sale displays, and statements in
brochures. The FTC's general rules relating to advertising are
straightforward: first, marketers must not mislead consumers; and
second, claims made about certain product attributes must be
substantiated before they are made. In addition, marketers must avoid
advertising or marketing that causes substantial injury that a consumer
cannot avoid, such as by following clear and prominent warnings and
disclosures.
It may be useful to expand on some of the concepts that underlie
these general requirements. With respect to the FTC's Deception
Analysis, there are several principles to keep in mind. First, the
Commission reviews advertising from the perspective of a reasonable
consumer in the target group. For example, for advertising to children,
the FTC will review the advertisement from the perspective of a
reasonable child. Second, the Commission is concerned about both
express and implied claims made in advertising--including claims that
relate to the safety characteristics of products. Third, the deceptive
interpretation of the ad does not have to be the only interpretation
for the ad to be found deceptive. Some advertising may be interpreted
in a variety of ways. If a deceptive interpretation is a reasonable
one, the company may be held liable. Finally, an advertiser can deceive
a consumer by what it doesn't say as well as what it does say. If they
omit information from advertising and marketing that is material in
light of the representations made in the ad, then it is deceptive.
I will turn now to the FTC Advertising Substantiation Policy. Under
this doctrine, every objective product claim, whether express or
implied, must be supported by evidence providing a reasonable basis for
the claim. If an entity makes a safety claim in its advertising, that
safety claim must be supported.
The amount and type of evidence required to support a reasonable
basis claim depends on a number of factors, including what experts in
the relevant scientific or technical field believe is reasonable. For
some claims--for example, representations about the health benefits of
a particular product--an advertiser may be required to possess clinical
testing or other scientific evidence that substantiates the claim. To
qualify as a reasonable basis, the tests or studies relied upon to
support the claims must have been conducted and evaluated in an
objective manner. In addition, the tests must have been done by
qualified persons, using procedures generally accepted in the
scientific community as giving accurate and reliable results.
I will next turn to the FTC's Unfairness jurisdiction. As noted
above, an unfair act or practice is one that causes substantial
consumer injury that is not reasonably avoidable and is not outweighed
by any countervailing benefits to consumers or competition. With
respect to unfair advertising, the classic example was the promotion of
razor blades by placing the products themselves in the comics section
of the Sunday paper. The Commission alleged that this practice created
a substantial and unjustified risk of injury to children. Certain
products may be safe or legal for adults, but not children, and the FTC
has used it unfairness authority to bring enforcement actions where
such products are marketed to children.
This brings me to the topic of today's hearing, which is dangerous
marketing claims. I would like to provide a few examples over the years
in which the FTC has used its deception and unfairness authority to
bring cases where safety was featured prominently in the product's
advertising. In one case, the Commission issued a complaint charging
manufacturers of add-on braking devices with making deceptive safety
claims for their products. Specifically, the Commission alleged that
the companies claimed, falsely, that their products were equivalent to,
and offered the same safety benefits as, anti-lock braking systems--
commonly known as ``ABS''--that are factory installed equipment on many
cars.\4\ In reality, these add-on aftermarket devices were
substantially different in design and operation from true ABS
equipment, and do not provide the same safety benefits. The Commission
eventually reached a settlement with the defendants that bars them from
making false or unsubstantiated claims about any aftermarket braking
product and requires that they have substantiation for any claims for
braking devices. The settlement also required the defendant to serve
its distributors with a summary of the order and to take reasonable
steps to ensure they comply with the order.
---------------------------------------------------------------------------
\4\ Press Release, FTC, Aftermarket Brake Marketer Settles FTC
Charges (July 23, 2003), https://www.ftc.gov/news-events/press-
releases/2003/07/aftermarket-brake-marketer-settles-ftc-charges.
---------------------------------------------------------------------------
Because cases that involve deceptive safety or health claims
clearly have the greatest potential for serious consumer injury, the
FTC will often impose specially crafted remedies in them. For example,
the FTC has required companies to send consumers who have purchased the
product a safety notice to alert the consumer of the Commission action
and to correct any misimpression about claimed safety benefits. It has
also required companies to modify trade names where the name clearly
communicates a safety claim, and disclosure alone cannot cure that
impression. For example, in the add-on brake case mentioned above, the
companies use the initials ``ABS'' as part of their product name and
the FTC sought to prohibit this use and required companies to include
corrective disclosures in future advertising and packaging materials.
Of course, the FTC is not the only government agency concerned
about truthful claims and the Commission routinely cooperates with
other Federal agencies, as well as state and local enforcement
officials. This is particularly true in cases that involve health or
safety claims, where the FTC will rely on the expertise of such
agencies as the CPSC, the EPA, and the FDA to help it analyze the
validity of the underlying claim. Indeed, many of the FTC cases are
initiated by referrals from other agencies.
I would like to finish with a discussion of two FTC actions in
which I was personally involved, and which bracketed my tenure as a
Commissioner, from 2012 to 2018.
In August 2012, the Commission announced a settlement with the
marketers of the Brain-Pad mouth guard.\5\ The Commission's complaint
alleged that Brain-Pad, Inc. lacked a reasonable basis for their claims
that Brain-Pad mouth guards reduced the risk of concussions, especially
those caused by lower jaw impacts, and that they had falsely claimed
that scientific studies proved that those mouth guards did so. The
final Order in that case prohibited the Respondents from representing
that any mouth guard or other equipment used in athletic activities to
protect the brain will reduce the risk of concussions, unless that
claim is true and substantiated by competent and reliable scientific
evidence. The Order also prohibited them from misrepresenting the
results of any tests or studies on such products, and from
misrepresenting the health benefits of such products. As the Director
of the FTC's Bureau of Consumer Protection noted when the settlement
was announced, ``Mouthguards can help to shield a person's teeth from
being injured, and some can reduce impact to the lower jaw. But it's a
big leap to say these devices can also reduce the risk of concussions.
The scientific evidence to make that claim just isn't adequate.'' When
the Brain-Pad Order became final in November 2012, Commission staff
sent out warning letters to nearly 20 other manufacturers of sports
equipment, advising them of the Brain-Pad settlement and warning them
that they might be making deceptive concussion protection claims for
their products. FTC staff then monitored the websites of these
manufacturers, working with them as necessary to modify the claims on
their sites and, in some cases, ensure that necessary disclosures were
clear and prominent.
---------------------------------------------------------------------------
\5\ Press Release, FTC, Settlement with FTC Prohibits Marketer
Brain-Pad, Inc. from Claiming that Its Mouthguards Can Reduce Risk of
Concussions (Aug. 16, 2012), https://www.ftc.gov/news-events/press-
releases/2012/08/settlement-ftc-prohibits-marketer-brain-pad-inc-
claiming-its.
---------------------------------------------------------------------------
The second matter I would like to discuss involved the marketing of
nicotine products. The FTC's law enforcement activities involving
tobacco advertising and promotion date back to the 1930s, and the
agency has played an important role in the adoption of requirements for
warning labels on tobacco products. The Commission also publishes
periodic reports on advertising and promotion activities in the
cigarette and smokeless tobacco industries, which provide information
on sales and on expenditures for various categories of marketing
expenditures. The FTC recently announced that it would begin collecting
such information for e-cigarettes.\6\
---------------------------------------------------------------------------
\6\ FTC, Statement of the Federal Trade Commission Concerning
Cigarette and Smokeless Tobacco 6(b) Orders (Feb. 25, 2019), https://
www.ftc.gov/system/files/documents/public_state
ments/1462887/e-cigarette_commission_statement_2-25-19.pdf.
---------------------------------------------------------------------------
As with other products, the Commission's primary role for tobacco-
related products is to ensure that products are marketed in a manner
that is truthful, not misleading, and adequately substantiated. The
Commission does not pre-screen advertising claims for tobacco-related
products or any other product. Instead, the agency addresses deception
in the marketing of tobacco-related products largely through post-
market law enforcement actions targeted against specific false or
misleading claims or unfair practices, just as it does for other
products.
Near the end of my tenure as Acting Chairman, in May 2018, the FTC,
jointly with the U.S. Food and Drug Administration (FDA) issued warning
letters to manufacturers, distributors, and retailers for selling e-
liquids used in e-cigarettes with labeling and/or advertising that
resemble kid-friendly food products, such as juice boxes, candies, or
cookies, some of them with cartoon-like imagery.\7\ Several of the
companies receiving warning letters also were cited for illegally
selling the products to minors.
---------------------------------------------------------------------------
\7\ Press Release, FTC, FTC, FDA Take Action Against Companies
Marketing E-liquids That Resemble Children's Juice Boxes, Candies, and
Cookies (May 1, 2018), https://www.ftc.gov/news-events/press-releases/
2018/05/ftc-fda-take-action-against-companies-marketing-e-liquids.
---------------------------------------------------------------------------
Some examples of the products outlined in the warning letters, and
being sold through multiple online retailers, include: ``One Mad Hit
Juice Box,'' which resembles children's apple juice boxes, such as Tree
Top-brand juice boxes; ``Vape Heads Sour Smurf Sauce,'' which resembles
War Heads candy; and ``V'Nilla Cookies & Milk,'' which resembles Nilla
Wafer and Golden Oreo cookies. Other products include ``Whip'd
Strawberry,'' which resembles Reddi-wip dairy whipped topping, and
``Twirly Pop,'' which not only resembles a Unicorn Pop lollipop but is
shipped with one.
Given the serious risk of child poisonings due to ingestion of
liquid nicotine, we stated that marketing these products in packaging
that is likely to be particularly appealing to young children could
present an unwarranted risk to health or safety and could thus be an
unfair advertising practice under the FTC Act.
Conclusion
Thank you for the opportunity to discuss how my former agency, the
FTC, has long used its authority over unfair and deceptive acts and
practices to challenge deceptive and unfair marketing claims that raise
health and safety risks. I look forward to your questions.
Senator Blumenthal. Thank you very much. I would like to
call on Senator Markey.
STATEMENT OF HON. EDWARD MARKEY,
U.S. SENATOR FROM MASSACHUSETTS
Senator Markey. Thank you, Mr. Chairman, very much. In
1990, I wrote the Children's Television Act to put limits on
the advertising that can appear during kids' television shows.
And then Congress passed that law and stopped advertisers from
flooding children with an endless stream of commercials and
manipulative marketing on TV. And those rules remain critical.
But no analogous rules exist for the Internet, yet we know
that today kids face a gauntlet of manipulative advertising
online. Ms. Fox Johnson, do you agree that Congress needs to
implement new safeguards to protect children from manipulative
marketing online?
Ms. Johnson. Senator Markey, thank you for a long standing
and steadfast commitment to protecting kids. I definitely agree
that Congress needs to pass new rules.
Senator Markey. Thank you. Dr. Jackler?
Dr. Jackler. Oh, I certainly agree, certainly in the
tobacco sphere. It has permeated many channels of media which
are frequented by kids, and that is something that should be
brought to an end.
Senator Markey. So kids are just manipulated into buying
products at every turn on the Internet, which is almost a part
of the culture of the internet. Do you agree with that?
Dr. Jackler. I do.
Senator Markey. Do you agree with that, Ms. Johnson?
Ms. Johnson. Definitely.
Senator Markey. Well, that is why Senator Blumenthal and I
have introduced the Kids Internet Design and Safety Act, the
KIDS Act, which establishes rules for the road for kids'
commercial contents on the internet. The bill will stop
websites from pushing ads to kids that include product
placement in children's online content, host selling, which is
when a character in a video that a child is watching appears in
an ad next to that video, program length advertising, meaning
commercials that last as long as the actual video a child is
watching online, and advertisements for dangerous products like
nicotine and tobacco online. Ms. Johnson, do you agree that
these safeguards are crucial to protecting children online?
Ms. Johnson. Senator Markey, I do. We have talked about how
host selling, and product placement and the pushing of unsafe
products are particularly pernicious for children online. So
stopping these practices will go a long way toward protecting
kids.
Senator Markey. Dr. Jackler, do you agree?
Dr. Jackler. Certainly. Products such as tobacco, alcohol,
things that are inappropriate in terms of sexuality don't
belong on children's TV. I will note that Juul ads ended up on
Nickelodeon and on a number of children's math game sites, and
that really was most inappropriate.
Senator Markey. Yes, our children deserve information, not
infomercials. And that is what these companies have figured out
how to do. You know, the kids are there, they have got them as
a captive audience on a program that the kids like, whether it
be Nickelodeon or anything else. Now, why don't we just give
them a program-length ad as well on a product that we want to
hoc to them? On channel four, five, seven and nine, that would
be prohibited, can't do it. Over here on the Internet, it is
the Wild West, no rules, anything goes, and we just have to end
that era here in our country.
Today, companies take every opportunity to hook consumers
when they are young and make them customers for life. One way
to do that is targeted ads to children online. I have
introduced the bipartisan Children and Teens Online Privacy
Protection Act with Senator Cassidy, and our legislation would
place an outright ban on targeted marketing directed at
children, which is inherently manipulative.
Ms. Johnson, do you agree that any comprehensive Federal
privacy law must include heightened protections for children
and teens, including a ban on targeted ads toward kids?
Ms. Johnson. I do agree, Senator Markey. We have to end
behavioral ads for children. Kids don't want it. Parents don't
want it. And it creates--it contributes to a culture of
surveillance. And also, if we ban targeted ads, we won't just
have benefits in the marketplace. We will also go a long way
toward limiting information collection and the profiling of
kids in the first place.
Senator Markey. And I know we have had difficulty in
figuring out what the Privacy Bill of Rights for adults should
be. But we go Congress after Congress, after Congress, after
Congress, 2 years, 2 years, 2 years, 2 years, a whole
generation of kids just grows up with no protections. So I
don't know if we can do adults, but in this Congress, at least,
we should be able to do children. Finally give them the
protections and maybe we will be able to do adults at some
point. But if we can't, we just--we lose a generation of kids
every four or 5 years.
You know, and it just makes no sense whatsoever that we
don't have those protections in place. So the Child Online
Privacy Protection Act of 1997 remains the constitution for
children's privacy. And I was proud to author that law. But
that only covers kids under 13. We have to raise it to 16. We
have to have more protections that parents can avail themselves
of in order to demand that companies just completely and
totally erase all information that they have gathered about
children. We need a privacy bill of rights for children in our
country online. We just saw the pernicious impact during the
COVID crisis. And as we go back deeper into it, once again,
more and more children are going to be online more and more of
the time.
So if I can, I would just like to ask whether or not we
should have a complete ban on menthol e-cigarettes. Do you
agree that we should have a complete ban on it? Attorney
General Stein, yes or no?
Mr. Stein. Yes, sir. It is how kids get hooked.
Senator Markey. And Dr. Jackler, same question.
Dr. Jackler. Absolutely. Menthol numbs the throat, is minty
and has long been a leading youth initiation brand. It should
be banned to protect young people.
Senator Markey. Thank you. And I know that when I was a
kid, they tried to hoc something called Kools, which were kind
of the entry level cigarette for kids, just so they could start
with something that was more mild. But it was all intended on
ultimately moving them toward Camels and Chesterfield's and
Lucky Strikes. Just the whole products introduction to a 12
year old.
My father told me when I was 12, I know you are going to
start--now, I started when I was 12, Eddie, just don't take the
quarter out of my pockets. Earn the quarter for the cigarettes
because I know you are going to start smoking. And my father
knew it. And guess what? These companies know, too. And that is
why they are marketing to them, because they have a customer
for life. And ultimately, my father died from lung cancer. But,
you know, our responsibility is to make sure that we just don't
allow these kids to get hooked.
And the FDA has to act. We have to act. We know that if a
kid doesn't start smoking by the age of 20, the chances of them
starting to smoke is almost zero. And so that is why they
target it, otherwise they don't have a long-term business
model. Thank you, Mr. Chairman, for this very important
hearing.
Senator Blumenthal. Thanks, Senator Markey. Senator Lujan.
STATEMENT OF HON. BEN RAY LUJAN,
U.S. SENATOR FROM NEW MEXICO
Senator Lujan. Thank you, Mr. Chairman, to the Ranking
Member, for this important hearing. Ms. Johnson, I am concerned
by the role social media and online advertising played in the
rise of vaping among teens aged 15 to 17. They are 16 times as
likely to be current Juul users than their older peers. The
difference is striking, and the role that marketing and
advertising played in this rise is undeniable.
Ads that target and track children are already a problem.
They follow kids everywhere and target them at an early age.
But accounts of children being advertised vaping products,
including on websites designed to help them with their
homework, are shocking. Kids should be safe from this content
like that at all times, and we need to get to the bottom of how
this is happening.
So when a social media company or advertising platform
pushes or their algorithms promote this harmful content to
children, who should be held accountable?
Ms. Johnson. Thank you, Senator Lujan. I think everyone
should be held accountable. The social media company, the
advertisers, the platforms, they are all profiting off of
pushing this ad to this kid, so they should all be held
accountable, and they all need to work together to better
protect children. They are the adults in the room. There are
multiple adults in the room. And it is not fair for everyone to
keep disclaiming responsibility or pointing to an algorithm
they will not explain how it works.
Senator Lujan. What are your recommendations for the best
ways to enforce that accountability?
Ms. Johnson. I think we need rules that put an onus on all
the parties involved. You know, one criticism of the YouTube
COPPA settlement we were discussing earlier was that enabled
YouTube to push a lot of the compliance burden off onto small
content creators and didn't have requirements for YouTube
itself to police and verify what content creators were saying
about their content.
Advertisers need to be held accountable for how they
identify their content and what audiences they are trying to
reach. And platforms and others need to be held accountable for
verifying advertisers are telling the truth and for not
enabling and encouraging the targeting of young people
themselves.
Senator Lujan. So, Mr. Jackler, the fact that flavored e-
cigarettes remain widely available is also extremely
concerning. Congress knew the risk of these products when it
banned most flavors from cigarettes in 2009 and again when it
extended the ban in 2020. But as you stated in your testimony,
companies have repeatedly found loopholes to keeping,
producing, and selling these harmful products, most recently by
classifying their products as containing, ``tobacco free
nicotine.''
These dangerous products they are labeling, it is confusing
and inconsistent at best. Consumers need a broad solution that
prevents companies from finding exceptions to requirements that
are passed by Congress or Federal agencies. Yes or no, is there
currently a consistent set of rules that apply for allowable
flavors for all nicotine products?
Dr. Jackler. [Technical problems.]
Senator Lujan. Following up on that is, this inconsistency,
it has been present for over a decade. Why does the United
States still not have a consistent set of rules across all
nicotine products, Dr. Jackler?
Dr. Jackler. Well, that is a question I ask as well. I
think that there has been a very permissive time over the last
decade. You know, there has been enormous innovation in the
nicotine delivery sphere, and that the companies that innovated
much faster than the regulatory and legislative processes could
keep up with them, frankly. And I think the other point being
that the tobacco industry has enormous resources, the smartest
people to figure out ways around and escaping the intent of
regulation.
For over a century, they have routinely escaped every
attempt to constrain its advertising and finding clever ways
around it. So I think it is important in fashioning regulations
and legislation, to do opposition research and think what is
going to come next? How do we close those gaps? And also when
there is a problem like the synthetic nicotine loophole that
could have been closed quickly, but the mechanism to do it
wasn't easily done, apparently.
I would--my personal view, and I think many of us believe
the FDA is very well justified and has the authority, saying
they are not tobacco products--they claim they are not tobacco
products. Fine, you are a drug. You are not approved, go off
the market. You can apply through CDER and become approved that
way.
Senator Lujan. And during the 2020 debate on this issue,
there was a big debate on nicotine. Just looking at that
narrowly with asking the question, what is the addictive nature
of these products? And Dr. Jackler, as you pointed out, had
that also been part of this focus to make it explicitly clear
whether synthetic as tobacco, had that also been included, that
loophole would not have existed.
Dr. Jackler. The nicotine in America is extremely
permissive. If you look around the world, throughout Europe,
the U.K., and Israel, it limits it to 17 milligrams per
millileter--like 2 percent. In America, there is no limit. The
only practical limit is when it gets too bitter from the
nicotine. So you have got Juul three times, four times that.
Potently addictive levels.
The second thing is you can now get e-cigarettes that are
these big tanks, that equivalent nicotine delivery of three and
a half cartons full of Camels or Marlboro. I mean, huge amounts
of nicotine. There is no way. We need to cap the amount of
nicotine in these products both by concentration and by volume.
Senator Lujan. I appreciate that. And, Mr. Chairman, I do
have a question for Ms. Ohlhausen, and I will submit that into
the record, bringing attention to rather than for big tobacco
companies with cigarette sales, now there are many other
smaller ones that we also need to get some answers to, to see
how we can be able to enforce that. So I thank you and I yield
back.
Senator Blumenthal. Thanks so much, Senator Lujan. We are
in the middle of a vote, we have two votes, so we are somewhat
time constrained. I have a question for former Commissioner
Ohlhausen, and then if the Ranking Member has questions, I will
turn to her. Could you tell us how the FTC worked with the FDA
to take action on e-cigarette brands that used kid-friendly or
kid-alluring products, and what more the FTC can do in that
regard?
Ms. Ohlhausen. Thank you, Senator. Yes, we had when I was
Acting Chairman, carrying on the long tradition of close dialog
with our sister agencies and the FDA in particular on things
involving safety and health issues. So when we became aware of
these kind of product packaging and labeling that have these
things that appeal greatly to children, juice boxes, cookies,
things like that, we coordinated and worked, our staffs worked
together to issue these joint warning letters.
And then the FDA actually took action against some that had
sold products to minors that was outside the FTC's authority,
but the FDA had the authority to take action there. And then
continue to monitor these websites. I know that the FTC and FDA
continue to work closely together and jointly did warning
letters to influencers and marketers after I left the
Commission in 2019.
So I believe that that coordination and close dialog
continues.
Senator Blumenthal. Thank you. I am going to be asking
questions for the record as well. This hearing has really been
excellent. One question that I would appreciate your answering
is going directly to what the FDA should do about Juul. We have
until September 9th. This record will be open for 2 weeks, but
the sooner you can answer that question and if you want to
offer brief responses now, I would be happy to take them, but
only if you feel ready to answer that question. Dr. Jackler.
Dr. Jackler. Juul can make all the arguments that it wants
about its path forward to the future. But it is a deeply
tarnished brand with a durable identity as a youth brand. And
that exists. It is not going to go away. It needs to be sunset.
The entire industry is the bigger issue. But with regard to
this particular product, it is too stained by its history and
by the durable view of it amongst American teens. No matter how
they dress it up and no matter how much they create scientific
dialog contrary to that of independent academics and
Government, it is not going to be persuasive.
And taking a forward looking approach, ignoring the
history--because it is not history, it is today. It is actually
still there, that awareness and the perception of Juul amongst
American youth. And that can't be cured at this point. It is
too late. It is too deeply established.
Senator Blumenthal. Thank you.
Ms. Johnson. We are deeply concerned about a product that
is unhealthy and popular with high schoolers and even middle
schoolers, and we will be happy to submit something to the
record.
Senator Blumenthal. Thank you. And Ms. Ohlhausen?
Ms. Ohlhausen. Yes, I will take the opportunity to also
submit a response for the record.
Senator Blumenthal. Thank you. Senator Blackburn.
Senator Blackburn. Thank you, Mr. Chairman. Just to
Commissioner Ohlhausen, we would appreciate in getting your
recommendations on the record as we look at COPPA and the
updates that needed to be done there.
Ms. Johnson, I appreciate your comments about the research
that needs to be done on the effect of this aggressive
advertising on our children. And we need to find a piece of
legislation that we can move forward with that. And, Mr.
Chairman, the only other thing I have is Juul labs did submit a
letter to us with Chairman Cantwell, and I think we should put
that into the record.
Senator Blumenthal. Without objection.
[The information referred to follows:]
Juul Labs
July 30, 2021
By E-mail
Hon. Maria Cantwell, Chair,
Committee on Commerce, Science, and Transportation,
United States Senate,
Washington, DC.
Re: August 3, 2021 Subcommittee Hearing
Dear Chair Cantwell:
On behalf of Juul Labs, Inc. (JLI or the Company), I am writing in
response to your invitation to testify at the August 3, 2021 hearing
entitled ``Toxic Marketing Claims and Their Dangers.'' We understand
the Consumer Protection, Product Safety, and Data Security Subcommittee
is interested in the marketing of electronic nicotine delivery system
(ENDS) products, including JUUL, and the impact of such marketing in
the United States and specifically on underage use.
We appreciate the invitation for our chief executive officer (CEO)
to testify before the Subcommittee, but must respectfully decline.
First, our current CEO is not in the best position to speak to
JLI's historical marketing that interests the Subcommittee. In the fall
of 2019 with new executive leadership, we fundamentally changed how
JUUL products are marketed and sold. For example, led by our CEO when
he joined, we immediately suspended marketing activities across media
channels and that suspension remains in place today.
Second, the Company's premarket tobacco product applications
(PMTAs) for the JUUL System are pending the Food and Drug
Administration's (FDA or the Agency) science-and evidence-based review
for new tobacco products. This rigorous review, in addition to the
scientific research to support the marketing of the product, includes a
tailored marketing plan and sales restrictions designed to limit
appeal, restrict access, and mitigate the potential for underage use.
Based on the totality of evidence in our PMTAs, the Agency will apply
the statutory standard of ``appropriate for the protection of public
health'' to determine whether our products meet that burden--accounting
for both current users of tobacco products and nonusers including those
underage. Moreover, should it authorize the marketing of our products,
FDA will impose requirements and restrictions as to their advertising
and marketing. Given the status of our applications, we seek to
preserve the integrity of and deference to this regulatory process.\1\
---------------------------------------------------------------------------
\1\ This position is particularly relevant given that certain
advocacy groups and members of Congress have attempted to influence
FDA's independent decision-making process to deny pending PMTAs. See,
e.g., Press Release, Subcommittee Hearing Offers Insight into Future E-
cigarette Regulation (June 23, 2021), available at https://bit.ly/
3yeUWMZ; Letter from Rep. Wasserman Schultz, et al., to FDA Acting
Commissioner Woodcock (March 23, 2021), available at https://bit.ly/
3lfh5rc.
---------------------------------------------------------------------------
To offer context for our approach, we provide information on our
reset led by our CEO and new executive leadership beginning in the fall
of 2019, recent positive declines in underage use of ENDS products
including JUUL, and the science-based PMTA process through which our
applications are currently under review. We ask that this
correspondence be included in the record for the Subcommittee's
hearing.
A Necessary Reset to Advance Tobacco Harm Reduction Responsibly
Our company and products exist for one purpose: to advance tobacco
harm reduction, based on science and evidence, by providing adult
smokers a potentially less harmful alternative to combustible
cigarettes and reduce the death and disease associated with combustible
cigarette use.
This harm-reduction approach is informed by FDA's Comprehensive
Plan for Tobacco and Nicotine Regulation that focuses on the role of
nicotine and that it, while addictive, is ``delivered through products
that represent a continuum of risk and is most harmful when delivered
through smoke particles in combustible cigarettes.'' \2\ The
Comprehensive Plan is supported by a science-based, regulatory
framework that aims to reduce cigarette-related death and disease and
provide ``potentially less harmful tobacco products [that] could reduce
risk while delivering satisfying levels of nicotine for adults who
still need or want it.'' \3\
---------------------------------------------------------------------------
\2\ FDA, Press Release, FDA Announces Comprehensive Regulatory Plan
to Shift Trajectory of Tobacco-Related Disease, Death (July 28, 2017).
\3\ S. Gottlieb, M.D., & M. Zeller, J.D., A Nicotine-Focused
Framework for Public Health, New Eng. J. of Med. (2017)
---------------------------------------------------------------------------
Pursuing the Comprehensive Plan is critical because the established
negative health effects of combustible cigarette use remain staggering
and consistent. Thirty-four million Americans continue to use
combustible cigarettes, resulting in approximately 480,000 preventable
deaths each year.\4\ Cigarette smoking remains attributable to 80-90
percent of lung-cancer deaths and a key risk factor for other cancers
and lung and heart disease.\5\ And as we know, it is the combustion
that kills--the burning of tobacco and inhalation of smoke and
thousands of toxicants that are the root cause of tobacco-related death
and disease.\6\ Our products, like other noncombustible alternatives,
can provide adult smokers--who are unable or unwilling to quit
nicotine--an off-ramp to combustible use and advance tobacco harm
reduction. That is our collective public-health opportunity: to
transition and completely switch currently addicted smokers from
combustible cigarettes.
---------------------------------------------------------------------------
\4\ See, Centers for Disease Control and Prevention, Current
Cigarette Smoking Among Adults in the United States, https://bit.ly/
3xaxjE7.
\5\ See Centers for Disease Control and Prevention, What Are the
Risk Factors for Lung Cancer?, https://bit.ly/3y8laRo.
\6\ See, e.g., U.S. Department of Health and Human Services, A
Report of the Surgeon General, The Health Consequences of Smoking: 50
Years of Progress (2014).
---------------------------------------------------------------------------
However, underage use of ENDS products, including JUUL, puts this
harm-reduction potential and public-health opportunity at risk. In
response to increased levels of underage use in the fall of 2019, new
executive leadership took necessary actions to reset our company and
product category to combat underage use and earn trust among
stakeholders. As our CEO testified on February 5, 2020 to the House
Energy and Commerce Committee, Subcommittee on Oversight and
Investigations: ``Over the past few years, trust in our company and
category has eroded. We know some of our past actions have contributed
to that erosion, and we are committed to taking concrete action to re-
earn trust.''
This reset included significantly changing the way we market and
sell our products to limit the appeal of and restrict access to those
underage. For example:
We suspended all advertising and promotion of JUUL products
through broadcast media (television and radio), print
publications, and digital channels (September 2019).
We refrained from lobbying the Administration on FDA's draft
guidance relating to flavor policy for ENDS products and
committed to fully support and comply with the final policy
when effective (September 2019).
We voluntarily suspended the sale of all non-tobacco and
non-menthol flavored JUUL products in advance of regulatory
requirements to do so (November 2019).\7\
---------------------------------------------------------------------------
\7\ FDA issued final guidance on its policy removing enforcement
discretion for any flavored, cartridge-based ENDS product (other than
tobacco or menthol) in January 2020. See FDA, Guidance for Industry:
Enforcement Priorities for Electronic Nicotine Delivery Systems (ENDS)
and Other Deemed Products on the Market Without Premarket Authorization
(Jan. 2020).
In addition, we restructured our company to focus resources on two
core tenets: the science and evidence to demonstrate that JUUL products
are viable, less harmful alternatives for adult smokers and the
development of technological solutions to combat underage use.
These actions were in addition to ceasing the marketing of JUUL
products on social media in November 2018. Although JLI no longer
advertises or promotes JUUL products on these platforms, we maintain a
global social-media monitoring program that identifies JUUL-related
content posted by third parties. When the Company identifies such
content, we work with platform owners to remove the posts and take
additional enforcement as needed. Since 2019, we have successfully
removed over 115,000 posts and over 2,300 accounts impacting over 1.4
million ``followers.''
We believe that marketing for ENDS products, like JUUL, requires
informed and tailored approaches to provide sufficient information to
adult smokers to transition and switch them completely from combustible
cigarettes, while limiting appeal and the potential for unintended
exposure among those underage. We believe our current and future
practices meet that responsibility.
Encouraging Declines in Underage Use of ENDS Products, But More Work
Needs to be Done to Ensure a More Responsible Marketplace
In addition to interventions like Congress's Tobacco 21 legislation
and FDA's ongoing enforcement, we believe our actions supported a
significant decline in underage use in 2020. Based on data from the
2020 National Youth Tobacco Survey (NYTS) conducted by FDA and the
Centers for Disease Control and Prevention: The overall prevalence of
high-school students who used JUUL products as their primary ENDS brand
in the past 30-days decreased from 16.1 percent in 2019 to 4.9 percent
in 2020. Among middle-school students, such use decreased from 5.6
percent in 2019 to 1.6 percent in 2020. Among current users of any ENDS
product (i.e., of those who used an ENDS product in the past 30-days),
use of JUUL as their primary brand decreased from 57.4 percent in 2019
to 26.6 percent in 2020.\8\
---------------------------------------------------------------------------
\8\ See Centers for Disease Control and Prevention, 2020 NYTS,
available at https://www.cdc.gov/tobacco/data_statistics/surveys/nyts/
data/index.html; K. Cullen, et al., e-Cigarette Use Among Youth in the
United States, 2019, JAMA (2019); T. Wang, et al., Characteristics of
e-Cigarette Use Behaviors U.S. Youth, 2020, JAMA (2021).
For reference, data from the 2020 NYTS showed a significant decline
in all ENDS use across high-and middle-school students. Among high-
school students, current use of ENDS (past 30-days) decreased from 27.5
percent in 2019 to 19.6 percent in 2020, while frequent use of ENDS
(use on 20 or more days in the past 30-days) decreased from 9.3 percent
to 7.4 percent. Among middle-school students, current use decreased
from 10.5 percent in 2019 to 4.7 percent 2020, while frequent use
decreased from 1.9 percent to 0.9 percent. In total, about 1.8 million
fewer youth are using ENDS products.
Use of combustible cigarettes continued to decline to historical
levels; with current use among high-school students now at 4.6 percent.
---------------------------------------------------------------------------
Results from the 2020 Monitoring the Future survey, funded by the
National Institute on Drug Abuse, showed similar declines in JUUL
product use among adolescents. The overall prevalence of 12th-and 10th-
grade students who used JUUL in the past 30-days decreased from 20
percent in 2019 to 13 percent in 2020, while daily use (use on 20 or
more days in the last 30 days) decreased from 6 percent in 2019 to 2
percent in 2020.\9\ Notably, researchers found:
---------------------------------------------------------------------------
\9\ See Univ. of Michigan, 2020 Monitoring the Future Survey,
available at http://monitoringthefuture.org/data/20data.html#2020data-
drugs; R. Miech, et al., Trends in Use and Perceptions of Nicotine
Vaping Among U.S. Youth from 2017 to 2020, JAMA Pediatrics (2020).
The study results on vaping brands provide insight into how
efforts to restrict access to vaping flavors fared. On the one
hand, efforts by some individual companies appear to have been
successful in reducing adolescent use of their product. Of
particular importance is JUUL Labs, which had the largest
market share for vaping products in 2019. It announced in
November 2019 that it would voluntarily self-regulate and stop
selling all flavors other than tobacco and menthol in light of
evidence that other flavors such as mint and mango that it had
previously sold were the most commonly used flavors among
adolescents. The results from this study show that adolescent
use of JUUL subsequently dropped dramatically.\10\
---------------------------------------------------------------------------
\10\ Id. at E5.
General declines in underage use, however, are being offset by
significantly increased use of flavored disposable ENDS products, which
JLI does not manufacture or market. These products, largely imported
from Chinese manufacturers, are sold online and at retail in a variety
of flavors (e.g., Rainbow Candy Ice; Strawberry Watermelon Kiwi; Blue
Raz) and are marketed across social media and other unrestricted
channels.
In the 2020 NYTS, current use of disposable products increased
approximately 1,000 percent among high-school students and
approximately 400 percent among middle-school students.\11\ Based on
data from the 2020 MTF survey, among 12th and 10th graders who had
vaped nicotine in the past 30 days, 27.8 percent of respondents
selected ``Other'' as the brand of ENDS used most often, with 30
percent of respondents actually writing in ``Puff Bar'' or a spelling
variant thereof.\12\ As researchers noted:
---------------------------------------------------------------------------
\11\ See T. Wang, et al., E-cigarette Use Among Middle and High
School Students--United States, 2020.
\12\ See R. Meich, et al., Trends in Use and Perceptions of
Nicotine Vaping Among U.S. Youth From 2017 to 2020.
Some adolescents were able to continue using vaping flavors in
part because they switched away from cartridge-based vaping
devices such as JUUL, for which flavors were not readily
available, and moved to newer, disposable vaping devices that
come in a variety of vaping flavors and surged in sales after
JUUL's decision to discontinue selling flavors other than
tobacco and menthol. While JUUL prevalence among youth who
vaped in the past 30 days fell an absolute 18 points in 2020,
this decline was offset in part by an absolute increase of 8
points in Puff Bars, a disposable brand that comes in a variety
of flavors other than tobacco and menthol.\13\
---------------------------------------------------------------------------
\13\ Id. at E5.
Notably, many of these flavored disposables appear to be marketed
illegally. Under FDA laws, regulations, and policy, only those ENDS
products that were on the market as of August 8, 2016, and had a
product application submitted to FDA by September 9, 2020, may be on
the market.\14\ Based on market data, however, the vast majority of
disposable products were introduced beginning in 2019 and thus subject
to enforcement action immediately. In fact, the Agency has enforced
against such products, including warning letters to disposable
manufacturers for illegal marketing.\15\
---------------------------------------------------------------------------
\14\ See, e.g., FDA, Perspective: FDA's Preparations for the
September 9 Submission Deadline (Aug. 31, 2020), https://bit.ly/
3zQVCca.
\15\ See FDA News Release, ``FDA Notifies Companies, Including Puff
Bar, to Remove Flavored Disposable E-cigarettes and Youth-Appealing E-
Liquids from Market for Not Having Required Authorization'' (July 20,
2020), available at https://bit.ly/3iawVBe; FDA, Warning Letter to XL
Vape, LLC d/b/a Stig, Inc (Sept. 9, 2020), available at https://bit.ly/
3794Kws.
---------------------------------------------------------------------------
Flavored disposables remain a concern and underage use of JUUL
products remains unacceptable. But we are encouraged by the recent
declines observed in 2020 and more can and should be done to accelerate
reductions in underage use of all ENDS and other tobacco products going
forward. We believe that comprehensive, evidence-based interventions
built on limiting appeal through marketing and restricting access at
retail are critical tools to address underage use and we continue to
implement such measures and advocate for category-wide adoption.
Deference to a Science-and Evidence-Based Process While Maintaining
Transparency Among Stakeholders
As part of our ongoing effort to reset relationships with
stakeholders, including policymakers, we strive to be both constructive
and transparent. We appreciate there are legitimate questions on the
public-health role of JUUL and other ENDS products. Open dialogue is
and should remain imperative. As our CEO stated at the February 2020
Energy and Commerce subcommittee hearing: ``[M]y company is working
hard to listen to our stakeholders in the hope of making progress
together toward the twin goals of helping adults switch away from
cigarettes, while combatting underage use.''
Critically, through the pending review of our PMTAs, our regulator
is evaluating those very considerations to determine whether JUUL
products meet the statutory standard of being appropriate for the
protection of public health.
The PMTA process, as established by Congress, is one based on
science and evidence and subject to FDA's independent and thorough
review by career scientists, technical experts, and regulatory
professionals across disciplines. This rigorous, science-based review
enables the Agency to serve as the gatekeeper of new products and
authorize their marketing if determined to be appropriate for the
protection of public health. While manufacturers, like JLI, bear the
obligation of providing necessary information, scientific data, and
analysis to support the marketing of their products, ultimately FDA
determines whether such products have a net positive effect on the
health of the population as a whole--accounting for both current users
of tobacco products and nonusers including those underage.
On July 29, 2020, JLI submitted PMTAs for the JUUL System. Our
applications include over 110 scientific studies across research
disciplines to demonstrate the harm-reduction potential of the JUUL
System for adult smokers. Research ranges from assessing the reduced-
risk of our products compared to combustible cigarettes through
nonclinical and clinical studies to an expansive behavioral research
program that evaluates the ability to transition and completely switch
adult smokers from combustible cigarettes.
Our science is presented alongside our evidence-based interventions
for the marketing and sale of the JUUL System to address and reduce the
potential for underage use. Under the PMTA process, FDA will review
proposed marketing plans submitted by manufacturers on how and where
they will market their products.\16\ For our PMTAs, we provided a
detailed marketing plan, including representative marketing materials,
that is based on advertising and promotion tailored to adult smokers
through narrow marketing channels to limit the potential for unintended
exposure among those underage. And as to our current practices, we have
committed to stay off broadcast and digital channels and social media,
as well as refrain from using influencers, bloggers, and brand
ambassadors to market JUUL products.
---------------------------------------------------------------------------
\16\ See Family Smoking Prevention and Tobacco Control Act,
Sec. 910(b)(1)(A); FDA, Guidance for Industry: Premarket Tobacco
Product Applications for Electronic Nicotine Delivery Systems (June
2019); Proposed Rule, Premarket Tobacco Product Applications and
Recordkeeping Requirements, 84 Fed. Reg. 50566, 50580-50582 (Sept. 25,
2019).
In January 2020, FDA released the final rule for PMTAs to the
Office of the Federal Register but was withdrawn as a result of the new
Administration's memorandum on ``Regulatory Freeze Pending Review.''
The final rule included similar requirements relating to the submission
of marketing plans in PMTAs and is now pending review by the Office of
Information and Regulatory Affairs.
For reference on the breadth and types of marketing requirements
and restrictions applied to authorized PMTAs, see FDA, Technical
Project Lead Review for Primary STN(s) PM0000424, PM0000425, PM0000426,
and PM0000479 at 103-110, available at https://bit.ly/2V1VUxV.
---------------------------------------------------------------------------
Since their submission, our PMTAs have been processing through the
various stages of FDA's deliberative review. Currently, the
applications are under substantive review; meaning the most thorough
review stage in which the Agency is evaluating the scientific
information and data within the PMTAs to determine whether to authorize
our products for continued marketing.
We also note that FDA is reviewing thousands of applications
covering millions of ENDS products submitted from other manufacturers
by the September 9, 2020 deadline. This is a significant and
unprecedented burden, but the Agency is making considerable progress in
the review of these applications.\17\ Through this critical, science-
based review, FDA will apply the standard as entrusted by Congress to
determine whether the marketing of JUUL and other products are
appropriate for the protection of public health. Such evaluation and,
for some, validation on the science and evidence will have a
significant effect on altering the trajectory of cigarette-related
death and disease in the United States and advancing tobacco harm
reduction.
---------------------------------------------------------------------------
\17\ See, e.g., FDA, Perspective: FDA's Progress on Review of
Tobacco Product Applications Submitted by the Sept. 9, 2020 Deadline
(Feb. 16, 2021), https://bit.ly/35gS8lC.
---------------------------------------------------------------------------
Given the status of our PMTAs amid regulatory review, we defer to
the science and seek to preserve the integrity of an administrative,
evidence-based process--one free from external influence and
interference. This is particularly relevant given legitimate concerns
on various attempts to undermine FDA's ongoing evaluation and direct a
specific decision on pending product applications.
***
We remain steadfast in our belief that our company and product
category needed a reset to earn the trust and license to operate from
our stakeholders and society. ENDS and other noncombustible products,
substantiated by science, can present a significant public-health
opportunity by providing adult smokers a viable alternative to
combustible cigarettes--a product that will kill half of all long-term
users. But only if we equally combat underage use and market and sell
these products responsibly.
While we have made progress, we recognize there is much work to do
and we must continue to listen, learn, and engage stakeholders to
advance tobacco harm reduction in support of the Comprehensive Plan and
reduce tobacco-related death and disease in the United States.
Respectfully yours,
Katherine E. Rumbaugh,
Senior Vice President,
U.S. Federal and State Government Affairs.
cc: The Honorable Roger Wicker, Ranking Member
The Honorable Richard Blumenthal, Chair, Subcommittee on Consumer
Protection, Product Safety, and Data Security
The Honorable Marsha Blackburn, Ranking Member, Subcommittee on
Consumer Protection, Product Safety, and Data Security
Senator Blackburn. And I just thank you all for being here
and for being open to answering our questions that will come
following the hearing. And, Mr. Chairman, good hearing. Thank
you very much.
Senator Blumenthal. Thank you. This hearing will remain
open for two weeks, the record will remain open. I am going to
submit for the record, if there is no objection, an American
Prospect article entitled, ``Juul Taking Academic Corruption To
A New Level,'' which I think says a lot about accountability.
[The information referred to follows:)
Knowledge Tracker
Juul: Taking Academic Corruption to a New Level
The e-cigarette company bought an entire issue of a scholarly journal,
with all the articles written by authors on its payroll, to `prove'
that its product has a public benefit.
BY DAVID DAYEN
JULY 7, 2021
For years, I've followed the story of Juul, which came out of
nowhere to control nearly the entire market for e-cigarettes. Altria,
maker of Marlboros, purchased 35 percent of Juul in late 2018, valuing
it at the same level as Target, Delta Airlines, and the Ford Motor
Company at the time.
Juul's dominance dissipated around the time that over a thousand
people contracted a mysterious vaping-related sickness in the fall of
2019, and state and federal regulators started to investigate the
company's blatantly obvious marketing to teenagers. Within weeks,
Walmart stopped stocking e-cigarettes, television ads for the product
came down, cities and states banned sales, and Juul eliminated the
flavored vape pods that were most clearly designed to attract young
people. Juul's market share in e-cigarettes shriveled from around 75
percent to 42 percent.
Now the company is in a fight for survival. The Food and Drug
Administration (FDA) will soon decide whether to allow Juul to continue
selling its products in the U.S. At issue is whether the public-health
benefit for converting cigarette smokers to vaping outweighs
introducing an entirely new generation to nicotine addiction. The
decision will be made by early September.
Juul is spending millions in lobbying and persuasion to get the
FDA's green light to continue operations. But a Tuesday New York Times
article on the subject contained a fascinating nugget midway through,
which could be described as a buried lede (journalese for putting the
most explosive part of a story in the middle of the piece). Juul, the
Times reports, ``paid $51,000 to have the entire May/June issue of the
American Journal of Health Behavior devoted to publishing 11 studies
funded by the company offering evidence that Juul products help smokers
quit.''
The corruption of academic research is not a new subject.
Corporations fund third-party studies and benefit from ``independent''
validation of their perspectives all the time. But this is a new
wrinkle. Juul didn't just front money for a couple of academic papers;
it bought an entire edition of the American Journal of Health Behavior
(AJHB), which it can then point to as ``proof'' that its product has a
public-health benefit, the key question currently before the FDA.
And the more you look at this story, the stranger it gets.
The $51,000 fee included $6,500 to unlock the entire journal for
public access--so you can read the entire special 219-page Juul issue
here. It's fascinating. There are 26 named co-authors on the 11
studies. According to the ``Conflict of Interest'' statements
associated with them, 18 of the co-authors are either current full-time
employees of Juul, or were full-time employees at the time they
conducted the research. Five others are consultants with
PinneyAssociates, working ``on an exclusive basis to Juul Labs.'' And
the final three, who co-authored one of the 11 studies, are employees
of the Centre for Substance Use Research, an ``independent''
consultancy that designed that study under a contract with . . . Juul
Labs.
Pretty much all the articles take the Juul party line that e-
cigarettes help convert smokers away from combustible tobacco products,
and thus aid public health. Pretty much none of the articles mention
that Juul and other vaping companies make their money by attracting
countless new people to nicotine addiction. And it's barely worth even
commenting on the quality of the research when it all comes from the
same corporate source.
Saul Shiffman, one of the PinneyAssociates consultants, took a co-
author credit on ten of the 11 studies. ``In that role, he acted as the
internal editor and coordinator for the papers in this special issue,''
reads the Conflict of Interest statement on the introductory note. So
not only were these studies all funded by Juul, not only was everyone
who wrote them on the Juul payroll, either indirectly or (in most
cases) directly, but the internal editor of the ``outside'' journal was
under contract with Juul as well.
Juul has not yet responded to a request for comment. In response to
a query, PinneyAssociates referred the Prospect to a previous response
from Shiffman and Erik Augustson, one of the former Juul employees.
``Our intention with these publications was to provide the nicotine and
tobacco research community--as well as the broader public health
community--with the opportunity to evaluate the research for
themselves,'' they wrote. ``All of the papers were subjected to the
journal's standard peer-review and editorial process and we believe the
underlying science is strong.'' They added that Dr. Elbert Glover,
editor in chief of the journal, oversaw all content.
But the American Journal of Health Behavior also bears some
scrutiny, beyond their selling a special issue to a corporation. The
journal has been around for 45 years, and prides itself on scrupulous
ethical guidelines, including the mandatory listing of conflict-of-
interest disclosures within all articles. But the AJHB follows a trend
among a handful of academic and scientific journals: Its authors must
pay to publish.
There's a whole fee schedule at the journal's website. Authors pay
$895 per article, and if they want the article to be made Open Access
so that everyone can read it, that jumps to $1,595. (Only a portion of
articles are accepted for Open Access, as most of the AJHB is gated.)
If you want more than six tables and figures in your article, that'll
cost you $150 a pop. And a ``theme issue,'' similar to the kind that
Juul bought, costs $2,500 per article, with an additional $500 to make
each article ungated, not including the $195-per-article service fee
for copyediting.
In this context, the $51,000 that Juul paid for the May/June issue
is not that far from what the AJHB would normally charge for a theme
issue with 11 studies ($33,000, plus extra for copy check and any
additional tables and figures above the prescribed limit). This turns
the work of a scientific journal into what looks like advertising.
I asked Rebecca Tushnet of Harvard Law School, who specializes in
advertising law, about the propriety of this arrangement. ``If Juul's
sponsorship is adequately disclosed, that would address most
advertising law questions,'' she said. Tushnet added that marketing can
be charged as misleading if the target is general consumers, but here
the publication, a scholarly journal, is designed for experts. ``One
might wonder whether experts are in fact all that resistant to
bullshit--it's common wisdom among scammers that doctors are among the
easiest to fool because of their self-confidence and expectations of
deference,'' she noted, ``but courts are understandably reluctant to
weigh in on publishing battles of the experts.''
FDA officials might not be aware of the degree of the pay-to-play
relationship in this Juul special issue.
There are multiple rip-offs going on here at once. Academics are
desperate to publish in journals to prove to their universities that
they are working diligently. Corporations recognize the opportunity to
underwrite research and produce independent validation of their goals.
And they turn around and use that research to persuade policymakers,
who presume themselves sophisticated about spotting fake research, but
probably are not.
At its FAQ page, the AJHB acknowledges that pay-to-publish
scholarly journals have become a real scourge in the scientific
community: ``[T]he recent proliferation of journals whose obvious focus
is the for-profit generation of revenue without regard to science
constitutes a development that creates a major problem for reputable
journals that must charge to deliver its service to the academic and
practice communities.'' Indeed, the Federal Trade Commission put out a
formal warning about ``predatory'' journal publishers in 2016. But the
AJHB justifies the charges by saying that, as a small organization
without a large membership base, it has ``no other choice without
incurring financial jeopardy.'' The American Journal of Health Behavior
did not respond to a request for comment.
To my eye, there looks to be little difference between the
corruption of for-profit scientific journals that degrade the quality
of available research, and the corruption in this particular scenario,
where an entire issue of a decades-old scholarly journal goes directly
into the hands of a private company that will use it to persuade a
Federal regulator about the efficacy of its product. FDA officials
might not be aware of the degree of the pay-to-play relationship in
this Juul special issue, and how that might compromise the science.
Clearly, some people associated with the American Journal of Health
Behavior were uncomfortable with the arrangement; according to the
Times, three editorial board members resigned in the wake of the
special issue.
I don't know if this academic journal gambit will save Juul's
business or not. I do know that Juul did its part to innovate in the
area of corrupting the very notion of scientific inquiry. So thanks for
that.
Any questions--any Senators who would like to submit
questions for the record should do so by August 17. We ask that
your responses, if you have any, be returned to the Committee
as quickly as possible.
And that concludes today's hearing. Thank you very, very
much to the witnesses, and this hearing is adjourned. Thank
you.
[Whereupon, at 4:12 p.m., the hearing was adjourned.]
A P P E N D I X
Response to Written Question Submitted by Hon. Amy Klobuchar to
Joshua H. Stein
State Enforcement. Last year, North Carolina sued e-cigarette maker
Juul Labs for allegedly marketing e-cigarettes to attract young people
and misrepresenting the potency and danger of nicotine in its products.
In June, North Carolina announced a $40 million settlement, under which
Juul will no longer target advertisements to minors.
Question. Can you speak to some of the most effective state
enforcement measures that should be considered on the Federal level?
Answer. The success of our lawsuit stems from our use of North
Carolina-specific statutes that protect consumers against unfair or
deceptive trade practices. And, since we sued Juul, dozens of states
have sued or opened investigations into Juul's marketing practices
under their own consumer-protection statutes and reached agreement on
resolving those cases. The thread that connects all of our lawsuits and
investigations is an underlying statute that allows the state to sue in
a parens patriae capacity to protect the state's consumers against
unfair marketing schemes. The FTC, of course, has similar authority
under similar laws. But, the laws across all of our jurisdictions are
different--each has different elements and different evidentiary
standards. And there are different limits on the monetary penalties
that can be assessed under each jurisdiction's statutes for violations.
So, from an enforcement perspective, it would be helpful for Congress
to focus on ensuring that Federal (and state) agencies have broad power
to crack down on the great many varieties of unfair marketing schemes
in existence today (and which may exist in the future)--and be able to
assess penalties that would be significant enough to deter unlawful
conduct.
But enforcement cannot be the only solution. As our lawsuit
demonstrated, enforcement mechanisms only penalize conduct after the
fact. We brought this lawsuit to hold Juul responsible for harming
millions of underage consumers in North Carolina. But, to bring this
epidemic to heel, we need to regulate conduct before the harm occurs.
This is why we need the FDA and other regulatory agencies of the
Federal government to take a stronger hand and establish the ground
rules for marketing these types of products in the first place. That
action will then allow the enforcement authorities (including my
office) to focus on bad actors who continue to violate consumer
protections, instead of forcing us to play whack-a-mole with every new
entrant into this space.
______
Response to Written Question Submitted by Hon. Amy Klobuchar to
Ariel Fox Johnson
Deceptive Marketing to Children and Teens. Protecting consumers,
especially children, from deceptive marketing and sales tactics is
critical. In January, the World Health Organization (WHO) reported that
from 2011 to 2020, e-cigarette use among U.S. high school students
increased from 1.5 percent to almost 20 percent. In your testimony, you
note that children up to age 12 have trouble understanding the intent
of an advertisement.
Question. What trends are you seeing in how tobacco is being
marketed to children and young users, and what measures should we take
to help address this problem?
Answer. Tobacco products are being marketed in similar ways as
other products online, meaning that companies are using newer
techniques which make ads even harder to distinguish from content, and
placing such ads on social media where many youth will see them and
start promoting them themselves. For example, JUUL used 20-something
social media influencers to popularize and promote its products on
social media through posts and popular hashtags (Jackler et al., 2019).
Teens viewing such posts may not immediately--if ever--understand these
were advertisements, but they would certainly want to imitate the cool,
good looking influencers. While JUUL has appeared to limit such active
promotions of its products more recently, the hashtags live on, and
promotion of tobacco products is now occurring via viral advertising
being carried on by youth themselves.
Congress and the Federal Trade Commission can take steps to address
these problems. Congress should pass legislation like the KIDS Act,
which would limit problematic commercial practices for youth online
(KIDS Act, S.3411, 116th Cong., 2020). The FTC can also update its
Endorsement Guidelines and make clear which practices are prohibited
for youth. In general, companies which sell products that are illegal
or unhealthy for youth should be limited in their abilities to push ads
to young people, including ads via influencers. Endorsement and
influencer ads are inappropriate for young children, and should not be
used for unhealthy food, drink, tobacco products, or alcohol for
teenagers either. Any endorsement ads shown to teens should also be
more clearly labeled.
______
Response to Written Question Submitted by Hon. Richard Blumenthal to
Ariel Fox Johnson
Question. Chairman Blumenthal asked during the hearing what Common
Sense would recommend the FDA do with its pending premarket review of
e-cigarettes and other new products?
Answer. We urge the Food and Drug Administration to ban flavored
products, prohibit high-nicotine products, and stop marketing to kids
of any nicotine products. Common Sense has watched with concern as teen
vaping rates have grown--with almost 8/10 teens now reporting vaping is
popular (Common Sense Media , 2019)--following viral youth marketing
and the use of flavors like fruit and mint to appeal to youth. Indeed,
flavors are the most-cited reason youth try e-vaping products (Ambrose,
2019; King, 2020; U.S.HHS, 2016). The fact that these new products can
contain significantly higher levels of nicotine than traditional
cigarettes is even more alarming. Current e-cigarette products contain
amounts of nicotine that are multiple times over what is permitted in
the EU and UK (Attorney General Letter to FDA Commissioner, 2021, 5).
We urge the FDA and all policymakers to act to counter e-cigarette
makers' efforts to addict a new generation.
______
Response to Written Questions Submitted by Hon. Cynthia Lummis to
Ariel Fox Johnson
Question 1. How, if at all, has the ``actual knowledge'' standard
outlined in the Children's Online Privacy Protection Act enabled
companies to evade sanction for collecting children's online data in
contravention of the spirit of the law?
If it has, do you believe that the ``actual knowledge'' standard
should be revised and replaced with a new standard?
Answer. The Federal Trade Commission has interpreted ``actual
knowledge'' under COPPA fairly strictly (Children's Online Privacy
Protection Rule, 16 C.F.R. Sec. 312 2013). This encourages companies to
simply avoid gaining strict ``actual knowledge''--by, for example, not
asking a child's birthdate or by not publicly telling advertisers or
others how old they think their audience is--even if they have full
expectation children are using the sites. As a majority of State
Attorneys Generals have explained, this strict actual knowledge
definition ``incentivizes companies to willfully ignore (or
strategically refuse to cognize) information they receive about child
audiences on their platforms,'' (Attorney General F.T.C. Letter COPPA
Rule Review, 2019, 5).
This is why newer laws, like the California Consumer Privacy Act,
make clear that ``actual knowledge'' covers those companies who are
willfully disregarding children (CCPA, Sec. 1798.120(c), 2018). This is
preferable to the current narrow Federal standard, but an even better
standard would be to require that companies offer privacy protections
if they have ``actual or constructive knowledge'' about child users--
essentially, if they know or have reason to know about children on
their sites and services. This is consistent with other civil knowledge
standards, and what is proposed in more recent COPPA update proposals
such as the one from Senators Markey and Cassidy (Children and Teens'
Online Privacy Protection Act, 2021).
Question 2. What specific design features, if any, can be included
or excluded in an online experience to make a user's consent,
especially when given by a minor or child, meaningful and informed?
If certain features are particularly important, please provide
examples, links, or citations to relevant materials.
Answer. Design features are important to ensuring that consent is
meaningful and informed. For young children, it may be the parents who
are giving consent. Young children should still be informed of what is
going on in an age-appropriate manner, however. And teens typically
give their own online consent.
In all situations, language and images should be appropriate for
the age of the audience. For example, with younger children and
teenagers, videos, graphics, and even cartoons for younger children can
be used to better explain what a service will do with information and
why it is seeking consent. Legalese should be avoided, and companies
should seek to present language that is a bit younger than the grade
level of the expected audience in order to capture a range of
abilities.
In terms of the location of information that is providing notice or
seeking consent, it is particularly helpful to offer ``just in time''
notices to young people and to adults, so that they are presented with
information at the time it is most relevant to them. Privacy
information should be prominent. And children may also be more likely
to read privacy related information when it does not feel separate from
the general service (e.g., hidden away at a link at the bottom of the
page).
The UK's Age Appropriate Design Code offers useful examples of age-
appropriate transparency in its Code Standard 4, available at https://
ico.org.uk/for-organisa
tions/guide-to-data-protection/ico-codes-of-practice/age-appropriate-
design-a-code-of-practice-for-online-services/4-transparency/. And the
UK Information Commissioner's Office recently published a useful
report, ``Designing data for children,'' available here https://
ico.org.uk/media/2620177/designing-data-transparency-for-children.pdf.
______
Response to Written Questions Submitted by Hon. Marsha Blackburn to
Ariel Fox Johnson
Question 1. Ranking Member Blackburn asked during the hearing about
ads that give children additional tokens or more gameplay and who has
engaged in this practice.
Answer. Asking children to watch ads in exchange for additional or
easier gameplay or other in-game rewards is common even in young
children's apps. In one study of popular apps marketed to or played by
children under 5, researchers observed ``incentive ads'' (which would
unlock levels or items) in almost 25 percent of free apps and in 15
percent of other apps. One example of this is in the Masha and the Bear
Vet Clinic app, where players attempting to obtain medicine and
supplies to treat sick animals can get faster and more effective items
if they watch a video advertisement denoted by a video icon in the game
(Meyer et al., Advertising in Young Children's Apps: A Content
Analysis, 2019).
Question 2. Ranking Member Blackburn asked if there is a good piece
of legislation to move research on the effects of ads and marketing to
kids.
Answer. The Covid-19 pandemic and subsequent stay-at-home orders
have left kids and families relying on screens even more than they
already did. Meanwhile, the relationship between screen time, social
media, and mental health among kids and teens continues to be extremely
nuanced. It is more critical than ever that families, technologists,
and lawmakers have independent, longitudinal research necessary to take
an evidence based approach to ensuring the safety and impact of tech--
including online marketing--on young people. The bipartisan and
bicameral CAMRA, or the Children and Media Research Advancement Act,
would amend the Public Health Service Act to authorize a five-year
program within the National Institutes of Health (NIH) to facilitate a
greater understanding of the health and developmental impacts of
digital media use--including advertisements--on infants, children, and
adolescents. CAMRA allocates $15 million per year for the first three
years and $25 million per year for the remaining two years and would
require NIH to:
Conduct and support research on the developmental effects of
digital media, including but not limited to, social media,
websites, television, motion pictures, mobile devices,
computers, and video games--on children of all ages;
Develop a research agenda on the health and developmental
effects of digital media on infants, children, and adolescents
to inform research made possible under the proposal;
Establish a research program on the health and developmental
effects of media on infants, children, and adolescents; and
Submit a preliminary progress report to Congress within one
year.
CAMRA would be an excellent vehicle in which to better study and
understand the effects of digital advertising and marketing to
children.
______
Response to Written Questions Submitted by Hon. Ben Ray Lujan to
Maureen K. Ohlhausen
1. In his testimony, Mr. Stein highlights a very important point
that separates this problem we're facing today with vaporized nicotine
compared to the fight against traditional cigarettes in the 1990s.
Rather than having four companies that can be held individually
accountable, there are dozens of companies pushing these products.
Question. How can the FTC ensure Federal consumer protection laws
are enforced against all manufacturers of e-cigarette products, rather
than just the biggest companies?
Answer. FTC's law enforcement activities involving tobacco
advertising and promotion date back to the 1930s and involve oversight
of large and small companies. The Commission's periodic reports on
advertising and promotion activities in the cigarette and smokeless
tobacco industries provide information on sales and on expenditures for
various categories of marketing expenditures, and, in 2019, the FTC
announced that it would begin collecting such information for e-
cigarettes. As the FTC gathers information about claims made regarding
e-cigarettes, it should be alert to unfair or deceptive claims made by
e-cigarette manufacturers, regardless of size, and take action
accordingly. During my tenure as acting-Chairman, for example, in 2018
we took action against a number of small companies to address the
marketing of liquid nicotine products in a way that appealed to
children.
2. This hearing was very helpful in understanding the full
regulatory context for protecting children from these types of products
intended for adults. Such a regulatory framework includes limits on
advertising, as well as science-based regulations to address concerns
around manufacture, sale, and use.
Question. As we consider regulatory frameworks for other products
intended for adults, including cannabis, do you believe a comprehensive
regulatory approach is the correct one to limit youth access and
support product safety?
The FTC routinely cooperates with other Federal agencies, as well
as state and local enforcement officials, to protect consumers. This is
particularly beneficial in cases that involve health or safety claims,
where the FTC will rely on the expertise of such agencies as the CPSC,
the EPA, and the FDA to help it analyze the validity of the underlying
claim and to assess any risks to users. This approach is especially
important for products that are not appropriate for youth due to health
and safety concerns.
[all]