Instagram Hit with Class Action Lawsuit

Instagram Hit with Class Action Lawsuit

By Sarah Pierce

Just hours after Instagram announced it was changing its terms of service so that it would have the right to sell users’ photos to third-party advertisers, the company was hit with a class action lawsuit in California.

Lead plaintiff Lucy Funes alleges in the Instagram class action lawsuit that the Facebook-owned site violated the property rights of its users and breached its existing terms of service by announcing the change. Under the new policy, Facebook claimed the right to license public Instagram photos to third parties, including for advertising purposes, without notifying or compensating the photographer.

Instagram announced the changes last week, which caused immediate backlash from users that said they would close their accounts when the new terms of service kicked in on January 16. Instagram backpedaled a few days later and issued an apology, saying it would “remove” language from its legal terms that would have allowed it to sell users’ photos or use them in ads.

Founder and CEO Kevin Sitcom chocked it up to a miscommunication about Instagram’s intentions, saying it’s “our mistake that this language is confusing.”

“Going forward,” Systrom wrote in a company blog post, “rather than obtain permission from you to introduce possible advertising products we have not yet developed, we are going to take the time to complete our plans, and then come back to our users and explain how we would like for our advertising business to work.”

Systrom denied the company ever intended to sell users’ images.

“I want to be really clear: Instagram has no intention of selling your photos, and we never did. We don’t own your photos — you do,” he said.

Funes alleges in the Instagram class action lawsuit that the company is making a “grab for customer property rights” and is attempting to protect itself by inserting a no-class action arbitration clause prohibiting users from seeking legal injunction against the service.

The Instagram class action lawsuit says it “is acting to preserve valuable and important property, statutory, and legal rights” before legal action is “forever barred by adoption of Instagram’s New Terms.”

The proposed Instagram class action lawsuit also takes issue with Instagram’s announcement that once the new terms go into effect in January, users could not opt out but could delete their accounts before the deadline.

“In short,” the class action lawsuit says, “Instagram declares that ‘possession is nine-tenths of the law and if you don’t like it, you can’t stop us.'”

The Instagram class action lawsuit is seeking to void parts of the terms of service, including sections waiving legal damages against Instagram and those granting the company ownership over user photos.

Facebook said the “complaint is without merit and we will fight it vigorously.”

Updated December 28th, 2012

All class action and lawsuit news updates are listed in the Lawsuit News section of Top Class Actions