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General Mills abandons controversial legal policy to strip consumers of rights

The General Mills logo is seen on a box of Cheerios cereal in this file photo.

JIM YOUNG/REUTERS

General Mills has completely reversed itself on a controversial legal policy that saw it try to strip consumers who downloaded coupons or otherwise participated on its website from the right to sue the U.S. food giant.

The maker of Cheerios found itself facing criticism last week after The New York Times reported that the company had changed the fine-print legal terms on its website to say that users were agreeing to have any dispute with the company referred to private arbitration and that they could not sue or join a class action.

While the company denied the report that consumers who even "liked" its F‎acebook page were signing away their right to later sue, it said late Saturday on its website that its policy had been "mischaracterized" but that it was changing it back.

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"We rarely have disputes with consumers – and arbitration would have simply streamlined how complaints are handled," said Kirstie Foster, the company's director of external communications in a blog post on the General Mills website. "Many companies do the same and we felt it would be helpful. But consumers didn't like it."

The company says its new legal terms make no mention of arbitration, and says the legal terms it posted last week would never be enforced.

‎Saying that such clauses are commonly used by other companies, Ms. Foster says General Mills "never imagined" the legal terms would prompt the reaction they did.

"We're sorry we even started down this path. And we do hope you'll accept our apology," the blog post reads. "We also hope that you'll continue to download product coupons, talk to us on social media, or look for recipes on our websites."

‎This kind of clause has become common in fine print for consumers, particularly when buying electronics or signing cellphone contracts.

While courts in the U.S. have increasingly upheld this kind of arbitration clause, legal experts said courts in Canada would have been reluctant to enforce General Mills' now rescinded legal terms. Ontario, Quebec and Alberta have passed consumer protection legislation that largely renders this kind of arbitration provision void.

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About the Author
Toronto City Hall Reporter

Jeff Gray is The Globe and Mail’s Toronto City Hall reporter. He has worked at The Globe since 1998. From 2010 to 2016, he was the law reporter in Report on Business, covering Bay Street law firms and white-collar crime. He won an honourable mention at the National Magazine Awards for investigative journalism in 2010. More

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