VELASQUEZ Business Ethics.

Concepts and Cases, 6th edn

The Tobacco Companies and Product Safety

On May 24, 2004, US District Judge Gladys Kessler ruled the big tobacco companies Philip Morris, Reynolds, and Liggett would be liable for $280 billion almost all their profits during the past 50 years if the US Department of Justice (DOJ) proved that since 1953 they knowingly conspired to deceive the public about the risks of smoking and its addictive nature, and so operated as outlaw companies in violation of the Racketeer-Influenced and Corrupt Organizations Act. The DOJ claimed that in 1953 the companies met in New York and formed a group called the Tobacco Industry Research Committee (TIRC) that began a conspiracy to deny that smoking caused disease and to maintain that whether smoking caused disease was an open question despite having actual knowledge that smoking did cause disease. In the 1950s, despite published research showing that smoking causes cancer, the group advertised there is no proof that cigarette smoking is one of the causes of lung cancer, and from the 1960s to the 1990s advertised that a cause and effect relationship between smoking and disease has not been established. The DOJ alleged the tobacco companies advertised that nicotine is not addictive even as they controlled the nicotine delivery of cigarettes so that they could addict new users. The DOJ also claimed the companies researched how to target their marketing at children abd actively marketed cigaretts to children. Finally, the DOJ stated that while the companies had a duty to test their product, to design a safe product, and to warn users of all dangers, the companies instead did no research and tried to suppress research on smoking risks, marketed a product that kills 400,000 Americans a year, designed low tar/low nicotine cigarettes whose risks were the same as regular cigarettes, failed before 1969 to warn of the risks and adictive nature of smoking, and targetted children who could not know the true risks of smoking.