Readers in Nevada may have heard that Instagram, the online photo sharing service, may have heard that the company recently changed its terms of service. Many users believed at the time that the changes mean that Facebook, Instagram’s parent company, will begin using people’s pictures in advertising without getting their permission or compensating them. Instagram has denied that it will sell photos to advertising companies, but the controversy has already led to civil litigation filed by a user.

The lawsuit is filed in another state but is seeking class-action status, so Instagram users in Nevada could be affected. The plaintiff in the suit say new clauses in the terms of service could lead to placing ads on its site based on user content, often without notice, and forcing users who wish to sue for breach of contract or other legal claims to go to arbitration. That would foreclose the possibility of class action litigation except in limited circumstances.

The plaintiff also complains about Instagram’s contention that users who object to the new terms may cancel their subscription, but that action means they concede their legal rights to their pictures to the company.

After rolling out the new terms in mid-December, Instagram took out the language about using people’s photos without compensation. However, critics say that the old terms of service explicitly promised to keep people’s photos private. One critic noted that Facebook often has reduced the privacy of users’ information in the past.

This case could be a lesson for Internet companies that have access to users’ information and property and the possible legal consequences of attempting to capitalize on that data.

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