General Mills' Legal Policy Could Threaten Consumer Goodwill

Company Says Change Is Being 'Broadly Mischaracterized'

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General Mills in recent years has put major emphasis on engaging consumers online, whether it be through Twitter, Facebook, or a multitude of websites -- from to Que Rica Vida -- that microtarget consumers. But a new legal policy threatens to erode at least some of the digital goodwill that the packaged food giant has earned with its fans.


The policy, first reported in the New York Times, informs consumers that they give up the right to sue the company if they engage in several types of online behavior, such as "joining our sites as a member, joining our online community, subscribing to our email newsletters, downloading or printing a digital coupon, entering a sweepstakes or contest" and more.

The new policy was posted to the General Mills corporate web site with an April 2 effective date. The rules began drawing attention in the wake of Times story, which was published online on April 16 and headlined, "When 'Liking' a Brand Online Voids the Right to Sue."

If a consumer who engages in the listed activities has a dispute with the company, the person would have to use "informal negotiations and, if these negotiations fail … binding arbitration," rather than going to court, according to the policy. The Times suggested that the policy, as written, might even apply to consumers who simply buy General Mills products.

General Mills in a statement issued early Thursday afternoon said the policy is "being broadly mischaracterized. No one is precluded from suing us merely by purchasing our products at the store or liking one of our brand Facebook pages."

The company continued: "For example, should an individual subscribe to one of our publications or download coupons, these terms would apply. But even then, the policy would not and does not preclude a consumer from pursuing a claim. It merely determines a forum for pursuing a claim. And arbitration is a straightforward and efficient way to resolve such disputes."

But at the very least, the policy has created a public-relations problem for the marketer, which owns big brands such as Cheerios, Yoplait and Green Giant.

Consumers began complaining on General Mills-run social-media sites hours after The New York Times story ran. "You can BET that I and everyone who I share this with will be avoiding you, your coupons and your food," said one person commenting on the Cheerios Facebook page, who linked to the Times story. "Why would we put up with this when there is an aisle filled with other choices and companies who treat us well? What's your answer to that?"

The New York Times reported that other companies have adopted similar policies in recent years, including credit-card companies and mobile-phone companies that have put provisions in consumer contracts. But the policy is fairly unprecedented for a food company, according to lawyers.

Stephen Gardner, the litigation director at Center for Science in the Public Interest, which has taken General Mills and other big food marketers to court, said he was skeptical that the policy passes legal muster. "A good court applying current law would never uphold any of it," he said. "This is really an absurdly brave new world that Mills has stepped into," he added.

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