Instagram was sold to Facebook earlier this year for $1 billion dollars. Facebook didn't buy Instagram to make its founders wealthy, it bought Instagram to monetize its users' content. Facebook expects to monetize Instagram in the same manner it is making money off of its users' content. This is why Facebook changed Instagram's terms and conditions last week.
Immediately after Instagram updated it terms and conditions, its users became very angry. Despite, Instagram's claim otherwise, its new terms of service greatly expanded its rights to utilize its users' content and unlike Facebook's terms and conditions, Instagram appeared to provide itself in perpetuity the right to monetize its users' content even after a user deleted his account.
Facebook and Instagram provide services that enable people and brands to interact with each other. In return for using their platforms, Facebook and Instagram have a right to utilize the information uploaded to make money off of the intellectual property contained on their websites. To better understand this one should review Facebook's terms and conditions that states, "you specifically give us the following permission, subject to your privacy and application settings:
you grant us a non-exclusive, transferable, sub-licensable,
royalty-free, worldwide license to use any IP content that you post on
or in connection with Facebook."
However, Facebook clearly states, "This IP License ends when you delete your IP content or your account
unless your content has been shared with others, and they have not
deleted it. Interestingly, it did not appear that Instagram included this sentence in their proposed updated terms and conditions.
Should Instagram's users be surprised at its decision to push the envelope on monetizing its users' content? Since Facebook owns Instagram, is Facebook using Instagram as a testing ground to determine how far they can go with monetizing their users' content before their users revolt? I discussed these issues with Bloomberg Television at the height of this news cycle:
The complete fallout from this matter is still yet to be determined. Even though there is a new report that states that Instagram has lost approximately 25% of its daily active users since its announcement that it would change its terms and conditions, it is too soon to speculate if the updated terms and conditions is the main factor.
It may be advisable to read the terms and conditions of every digital platform utilized so you don't become a Human Centipad.
To learn more about these issues you may contact me at www.shearlaw.com.
Copyright 2012 by the Law Office of Bradley S. Shear, LLC. All rights reserved.