Dannon Co. settled a false-advertising lawsuit Friday, agreeing to set up a $35-million fund to reimburse consumers who bought its Activia and DanActive yogurts.
The class-action lawsuit, filed in January 2008, alleged that Dannon lied when marketing its Activia and DanActive yogurts by trumpeting health benefits that didn't exist.
The White Plains, N.Y.-based yogurt maker denied the claims and admitted no wrongdoing as part of the settlement. The decision to settle was based on Dannon's desire "to avoid the distraction and expense of litigation," spokesman Michael Neuwirth said.
As part of the settlement, the company agreed to make changes to the labeling and advertising of Activia and DanActive by increasing the visibility of the scientific names of the "probiotic" cultures in the yogurts, court documents said. Dannon also agreed to remove the word "immunity" from its DanActive products.