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Instagram sued in class action for breach of contract

On Behalf of | Jan 2, 2013 | Business Litigation |

Florida readers are likely familiar with Instagram, the Facebook-owned company that provides online photo sharing services. The company is making headlines across the nation due to the recent filing of a class action lawsuit brought by Instagram users. At the heart of the case is a claim that the company is in breach of contract.

Instagram allows users to alter their uploaded photos by applying filters and other digital effects. The company was acquired by Facebook in 2012 for the price of $715 million. When the company released revised terms of service last week, many users balked at a clause that seemed to suggest that Instagram was reserving the right to use uploaded photos without compensation to the owners. The terms also state that users must go through mandatory arbitration to settle issues, and void their rights to participate in a class action suit against the company.

In response to consumer worries, Instagram released a statement that said the company never intended to use the photos of its users for profit, and deleted that language from the terms of service. However, the company kept a clause that gives them the right to use member photos in conjunction with advertising. For many, that distinction is not sufficient. The lawsuit points out that customers can cancel their profile, but that they will lose the rights to any photos uploaded previously.

Class action lawsuits such as this one provide excellent examples of the way that business litigation is shifting in response to an increasingly digital business environment. In some cases, the relationship between consumer and service provider has become so abstracted that issues can quickly become very contentious. In this case, Instagram users may feel that changes to the company’s Terms of Service constituted breach of contract, and were made in an attempt to gain future profits from uploaded user content. Florida residents who upload photographs or other work to the Internet should be sure to fully understand the rights that they may be forfeiting in the process, as well as their right to recourse under the law.

Source: New York Daily News, “Instagram hit with its first lawsuit after updates to terms caused anger among users,” Dec. 25, 2012