A Picture is Worth a Thousand …. Dollars???

In December 2012, the photo-sharing application Instagram announced plans to change its terms of service. The new terms said that Instagram could “sell user photo[graphs] to advertisers without paying them compensation”.[1]

The move was met with fierce opposition by Instagram users. They saw the amendments as an attack on their intellectual property rights and a drastic shift from the original, user-friendly terms, which only allowed Instagram to display members’ photographs next to advertisements, not in them.

Instagram tried to defend its decision claiming the proposal had been misinterpreted and that it had no intention of profiting from people’s photographs. Nevertheless, the damage was done. Celebrities with thousands of followers vowed to quit the service, daily usage decreased by 50% and threats of legal action ensued. The social media company relented on its proposal and the original terms were left to stand. 

Despite the back down, Instagram has reiterated its intention to generate revenue through advertising. This emphasis on monetising their platform is an expected by-product considering it is owned by Facebook, who acquired the company in April 2012 for almost 1 billion dollars.

The social networking heavyweight is familiar with cashing in on people’s data - by signing up to Facebook, account holders grant it a licence to use their intellectual property without payment. Its latest feature, the Facebook Graph Search, allows people to search for photographs by entering keywords, such as “Disneyland”. These photographs can be viewed regardless of who they belong to which poses an interesting prospect for advertisement companies.

Facebook’s proprietary terms of service have long caused member discontent. However, when Instagram tried to follow in big brother’s footsteps, the impact of consumer reaction hit harder as users could simply switch to another photo-sharing platform. Due to Facebook’s dominant market share there are virtually no alternatives for those who are unhappy with the handling of their intellectual property.

In the world of file sharing and social media, digital data is the currency. People are eager to share their photographs, but their privacy and the value of their intellectual property are sacrosanct. Instagram went over the line and this violation of its members' trust proved a commercial misstep. Social media platforms must develop means to turn a profit while ensuring that users are confident that their intellectual property is respected and secure. Needless to say a close eye will be kept on Instagram’s next move.

If you have any questions about how your intellectual property is being used or should be protected, get in touch with us. We can also offer advice on how to draft terms of service that balance business needs with user rights.  

This article was written with assistance from Lucy Hopman.



[1] “Instagram loses half its users following copyright policy backlash” (15 January 2012) Intellectual Property Magazine.