Tuesday, December 25, 2012

Instagram slapped with class-action lawsuit over new Terms of Service

Instagram has received an awesomely bad Christmas present: a lawsuit. As reported on Monday, Christmas Eve, the Facebook photo-sharing division has seen a proposed class action lawsuit filed in San Francisco federal court against it, after Terms of Service changes that take effect in mid-January.

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The lawsuit accuses Instagram of breach of contract, as well as other claims. The California Instagram user may have rushed to get the lawsuit in before the new ToS took effect. The new ToS includes a new mandatory arbitration clause, which forces users to waive their rights to participate in a class action lawsuit against the company, except under very limited circumstances.

The new ToS also spurred user suspicions that Instagram would sell their pictures without compensation for the user. The company later clarified the change, saying it had no intention of selling user photos, but it remains true -- and was true before the ToS changes were announced -- that the company has a non-exclusive license to use user photos.

Facebook, in a statement, said the lawsuit's accusations are without merit and that it will fight the action vigorously. "We believe this complaint is without merit and we will fight it vigorously," Facebook spokesman Andrew Noyes said in an e-mail.

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The lawsuit was filed by San Diego-based law firm Finkelstein & Krinsk. It says that customers who do not agree with Instagram's terms can cancel their profile, but then lose the rights to photos they had previously shared on the service. The lawsuit says:
In short, Instagram declares that "possession is nine-tenths of the law and if you don't like it, you can't stop us."
Facebook acquired Instagram in April for around $1 billion in cash and stock.

The civil lawsuit, filed in U.S. District Court, Northern District of California, is Lucy Funes, individually and on behalf of all others similarly situated vs. Instagram Inc., 12-cv-6482.

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