Instagram Sued Over Terms of Service
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UPDATED: Dec 28, 2012
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Last week, popular photo-sharing app Instagram announced changes to its Terms of Service, only to be met with outrage from consumers and a class action lawsuit brought by a group of angry Instagram users. Language in the TOS suggest the digital photo app could essentially sell a user’s photos or other data for payment through sponsored content or promotions, without compensating the photo taker.
Reuters reports that a first civil lawsuit was filed and that a proposed class action lawsuit is waiting for action in a federal court in San Francisco. Included in the claims are accusations of breach of contract. A mandatory arbitration clause was also added to the new policy, meaning if a consumer feels wronged, they don’t have the option to win damages in a lawsuit and are bound to the outcome of arbitration. But consumers are most upset by the suggestion that selling their photos for profit without compensation may be part of the new deal.
Instagram, which was bought by Facebook in 2012, responded to the outrage by removing parts of the new terms discussing the use of photos without compensation, but preserved parts allowing the company to “place ads in conjunction with user content,” reports Reuters. This would mean the company could still profit from user content.
Concerns are being voiced that even if an Instagram user chooses to cancel their account for fear of losing rights to their photos, they could still lose previously posted pics to the company and will have limited recourse if the mandatory arbitration clause is implemented.
Due to the massive wave of dissatisfied customers, the latest reports say Instagram has revised language in their proposed TOS. The policy no longer includes a clause allowing the company to profit from user photos. But even so, Instagram has lost a reported 25 percent of their consumer base since announcing the new terms.
Some are speculating that 25 percent is an insignificant number given the company’s millions upon millions of monthly users; and that the decline is a temporary trigger response to their policy alterations, which will not affect ongoing business. Others say that without corrective action, Instagram could be in danger of losing even more users as the holiday news reaches a bigger audience.