A Montreal woman initiated the lawsuit against Danone Inc. in 2009 contesting claims that its Activia, Activia Light yogurt and DanActive probiotic yogurt drink could strengthen the body's defences or regulate digestion because of bacteria they contain.
Danone denied any wrongdoing, but said it agreed to the settlement to avoid further court costs.
According to the settlement agreement, Danone evaluated the total potential compensation at $1.7 million.
Any class members who make a declaration that they purchased the yogurt after April 1, 2009, will qualify for $15 in compensation, according to the terms of the agreement.
Anyone with proof of purchase will qualify for between $15 and $50, depending on the amount of yogurt bought.
In Quebec, the Fond d'aide aux recours collectives will collect two per cent compensation awarded to residents.
Potential class members have to file a claim to be eligible for compensation.
The company will also pay the Montreal woman who spearheaded the suit $5,000 to compensate for her effort in bringing the case forward.
Words removed from packaging
Danone has agreed to remove the words "clinically proven," "immunity" and "scientifically proven" from its packaging and ads.
It will also soften the language it uses around claims that the yogurt will help regulate the digestive system by adding the qualifier "as part of a balanced diet and healthy lifestyle," according to the settlement agreement, which still has to be approved by Quebec Superior Court.
A hearing to approve the agreement is scheduled for Nov. 6.
In 2009, Dannon Co., as it is known in the U.S., agreed to a similar settlement, offering to reimburse customers and change its marketing and labelling for Activia and DanActive yogurt.
In 2010, the U.S. Federal Trade Commission and a U.S. District Court found that the probiotics in Dannon's products were not beneficial enough for the company to claim that they would prevent colds or flu, nor relieve irregularity.