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More Trouble for Instagram: Photo Sharing Developer Hit with Class-Action Lawsuit

Sites include , . Published on December 29th, 2012. Written by Anthony West.

While a lot of tech companies are getting ready to close the year on a high, Instagram is busy trying to play damage control and keep money in its pocket. That task just got a little harder because there are reports that the company (which is now owned by Facebook) is facing a class-action lawsuit brought on by its recent faux pas in changing its terms of service.

Reuters is reporting that law firm Finkelstein & Krinsk is handling the suit on behalf of Lucy Funes and others. The allegation is simple, when Instagram decided to make it company policy to sell user photos without their permission, the company violated a cardinal rule of privacy. Facebook of course is getting ready to defend against the suit and is claiming early that the allegations have no merit.

Let a court decide

The backlash surrounding the announced terms of service was swift and sharp—so swift and sharp that Instagram’s founder, Kevin Systrom issued a full public statement backtracking on earlier plans. That was enough to simmer tensions between Instagram and users—many of whom had promised categorically to leave the platform.

Systrom’s claim (along with Facebook) is that the privacy policy as it stands does not infringe because user content remains strictly under the ownership of the uploader. Systrom’s insistence that, “We don’t own your photos — you do,” is somewhat backed up by some elements of the reinstated terms of service. That particular section states that, “Instagram users own their content and Instagram does not claim any ownership rights over your photos. Nothing about this has changed. We respect that there are creative artists and hobbyists alike that pour their heart into creating beautiful photos, and we respect that your photos are your photos. Period.”

Despite this push-back, Finkelstein & Krinsk are pressing ahead with the lawsuit. “Instagram declares that ‘possession is nine-tenths of the law and if you don’t like it, you can’t stop us,’” reads one section of the lawsuit.

What next?

Instagram will probably fend off the lawsuit with the help of Facebook’s billions but the platform will have a much tougher task in regaining the confidence of users. Flickr and other competitors are just waiting for the exodus of Instagram users so Facebook and Systrom will need to act fast.

Thankfully for the company its Christmas and many in the tech space, as well as users will be busy celebrating and getting drunk. That should keep the heat off the company’s back. Come January 2, 2013, things will start again.

The lesson to be learned here by Instagram and to a lesser extent Facebook is that ultimately the power lies in the hands of users and without them there’s no business. Facebook’s culture of ‘pushing’ new features and terms onto unwilling users may just be hitting a wall and so it will be interesting to see what develops inside Facebook. The push to monetize Instagram’s millions of users will begin anew next year. Let’s just hope Systrom and co doesn’t do anything has hair-brained as it did recently.

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