Smile, Click, You’re Mine

Instagram, a web-based photo sharing program owned by Facebook, faces its first class action lawsuit.  An Instagram user is not too happy about changes in service announced last week that indicate the company may share photos without pay and include advertising.

The lawsuit, filed on Friday in San Francisco, claims breach of contract and violation of California’s unfair business practices law, for new terms that allegedly transfer to Instagram a worldwide license to each customers’ photos and artistic content.  In addition, the suit says the new terms include a mandatory arbitration clause that would force its users to give up class action rights.

Instagram, which was purchased by Facebook, announced on December 18, 2012, that it would change the terms of use beginning January 19, 2013.

The rights statement says that customers “hereby grant to Instagram a non-exclusive, fully paid and royalty-free, transferable, sub-licensable, worldwide license to use the content that you post on or through the service…”

Instagram is unlike other photo sharing services because it allows its users to add filters and special effects to their photos, in effect creating works of art or creative images.  They are able to share them easily on the internet.

The backlash to the new terms prompted a company response on its blog that was also cited by the lawsuit.  It noted that the change in terms was interpreted by many “that we are going to sell your photos to others without any compensation.  This is not true and it is our mistake that this language is confusing,” the company is cited as saying.  “To be clear: it is not our intention to sell your photos.”

This didn’t satisfy Lucy Funes, who sued.

Currently, Instagram has no mandatory arbitration clause in its agreement.  That changes in mid-January.

The lawsuit cited changed terms that allow customers who disagree with the new terms to cancel the service and remove their profile, but once they do they forfeit rights to their photos already a part of the service.

The lawsuit seeks an injunction barring changes in the contract terms and eliminating the mandatory arbitration.

Case:  Funes v. Instagram, Inc., No. 12-CV-6482NC


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