The company isn't absorbing the true cost of doing business. Many businesses have problems like this, like coal power plants that dump CO2 into the air. They d

The company isn't absorbing the true cost of doing business. Many businesses have problems like this, like coal power plants that dump CO2 into the air. They don't have to pay the costs of dealing with their actions. Tobacco companies don't have to pay for health care when people get sick from their product. This shifts part of the cost of doing business onto someone else, thus distorting their market.