SAN FRANCISCO (CN) - Back-pedaling furiously in the face of a federal class action, Instagram said it would withdraw its decision to claim the right to sell any photo its users send, for profit, to third-party advertisers, without even informing the sender.
Instagram, a photo-sending wireless service that Facebook bought this year for $1 billion, announced, then its new policy last week, then withdrew it amid a firestorm of protest.
Named plaintiff Lucy Funes claimed on Friday - hours after Instagram said it would change course - that the company's claim to have the right to use people's pictures in perpetuity and restrict how they can seek redress constitutes illegal misappropriation of property, violate California civil codes and Instagram's own former terms.
Facebook, which bought Instagram as a start-up, is not a party to the complaint.
Instagram also claimed it could limit damages to $100, though California law provides for statutory damages of $750 for "unauthorized use of a person's personality or photograph, and individual damages from unauthorized commercial use of valuable photographic art could be much higher."
Funes' class action did not make copyright or publicity rights claims, that commentators cited that as another problem with Instagram's power-grab: not just interfering with photo-taker's possible copyright claims, but with the rights of people in the photos that Instagram wanted to sell to advertisers.
The terms also "waive all customer rights to judicial remedies, except small claims, by engrafting a no-class action arbitration clause" and "artificially limit the statute of limitations for all claims against Instagram to one (1) year," the complaint states.
Instagram, in short, was "taking its customers' property rights, while insulating itself from all liability for doing so." If a customer objected, he or she could cancel the service, but "forfeit[s] all right to retrieve the property that was previously entrusted to Instagram, which retains rights thereto in perpetuity. In short, Instagram declares that 'possession is nine-tenths of the law and if you don't like it, you can't stop us," the complaint states.
She also claimed that the new "transferrable and sub-licensable" license to users' self-photographs and other likenesses "constitutes a nonconsensual commercial use of 'name, voice, signature, photograph or likeness'" that violates California law.
The class sued Instagram Inc. and Instagram LLC for breach of contract, bad faith, violation of California Civil Codes, breach of bailment and declaratory relief.
They want the worldwide "transferrable and sublicensable" license voided from the new terms; a court declaration that Instagram will not claim or exercise ownership rights over users' property without their express authorization and another saying customers do not waive their rights to equitable, injunctive or declaratory remedies or damages; customer controls on how Instagram and transferees/sublicensees can commercially exploit the property; and a change in procedures to allow users to download or otherwise obtain exclusive and actual possession of their property.
They are represented by Jeffrey Krinsk of Finkelstein & Krinsk of San Diego.
Instagram co-founder Kevin Systrom announced on the company's blog late Thursday night, Dec. 20, that it would change the advertising section of its terms of service back to its former policy.