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'Forced arbitration' becomes trend in business world

We have talked quite a bit about the internet and tech companies, and what they mean in the business world. Today, we will look at it from a slightly different angle: the strategies that businesses may use when handling their online presence.

One trend that has caught the eye of many legal experts is the idea of locking customers into "forced arbitration" simply by purchasing the product or "liking" a company's Facebook page. General Mills recently updated their privacy policy so that any consumers that download coupons, or enter a competition hosted by the company or gain any sort of benefit from the company are basically giving up their right to sue the company should something go wrong.

This idea of "forced arbitration," which General Mills calls binding arbitration, started when a judge refused to dismiss a case against General Mills. Implementing such a strategy was strengthened with a 2011 Supreme Court ruling that allowed companies to block consumers from "joining together in a single arbitration."

Obviously, this is a critical issue. On the one hand, businesses would be wise to use every legal element they can to protect their business. But in this case, it does seem like a sneaky strategy that will only upset consumers. We're talking about food items with General Mills. Under this policy, it is conceivable that a consumer would be unable to pursue litigation against the company if they mislabeled a product and someone died of an allergic reaction while eating said product.

It all goes back to the idea that businesses need to have a firm grasp of the laws that apply to them, and the legal implications of the rules and policies they roll out.

Source: New York Times, "When 'Liking' a Brand Online Voids the Right to Sue," Stephanie Strom, April 16, 2014

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