Instagram Still Has the Right to Commercialize Your Work (or Why You Should Read Terms of Service Carefully)

The creative community is comprised not just of professional artists, creators and innovators, but of anyone who creates, experiences or shares work in a way that supports creativity.  As we live more of our lives online, even those who do not create art for a living occasionally get a taste of the struggles professional creators face.  Indie artists and innovators have long struggled with the problem of overreaching contracts, which as freelancers, they often feel forced to accept “as is.”  This week’s flap over Instagram’s proposed change to its terms of service gave Instagram users a taste of what it is like to be a professional creator in numerous ways.  Not only did Instagram users express some of the same feelings of exploitation when they feared their work would be used and distributed by Instagram for commercial gain without their permission, but many also felt frustrated that their only option was to stop using a service they enjoy and rely on, rather than opt in or out of the proposed terms on a case-by-case basis.  Instagram users spoke out, loudly. And Instagram responded…  Or did they?

Instagram has issued a statement saying that it has heard its customer’s complaints, is removing the clause that most offended its customers, and reverting to its old terms of use.  But ironically, the clause that caused the outrage, and which Instagram says it has removed, was merely a disclosure and acknowledgment by the user of how Instagram could use a customer’s images.  Removing that clause alone doesn’t change the license the user grants Instagram.  Moreover, even if Instagram reverts to its current terms of service, those terms of use not only permit Instagram to commercialize user posted images in virtually unrestricted ways, they pass the responsibility for paying any royalties or fees owed for such commercialization on to the user who originally posted the works. 

Unless Instagram substantially revises its current terms of use to be more user friendly, users should consider two major issues before posting works to Instagram. Namely the overly broad license Instagram takes to images posted on the site that allows Instagram virtually unlimited use of user images, despite there being no connection to that use and the site’s functionality, and the fact that Instagram terms of use requires users to make warranties not just about the work they post, but about how that work will be used by Instagram now and in the future, holding users liable for royalties, fees, and other monies owed to any person as a result of the content posted and used on the site – despite the fact that a user cannot predict or control how that content will be used by Instagram or its services.

Overly Broad License

It is reasonable for sites that rely on user-generated content to take a license to content users upload to the site in order to enable the site to function and to improve services to users.

In responding to user complaints this week, Instagram declared:

“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.” 

Unfortunately, even under its current terms of use, Instagram takes a very broad license to works posted by users.  After declaring in the first sentence of the license grant by the user, “Instagram does NOT claim ANY ownership rights in the …Content that you post on or through the Instagram Services,” Instagram goes on to claim a license that is virtually indistinguishable from an ownership claim:

By displaying or publishing ("posting") any Content on or through the Instagram Services, you hereby grant to Instagram a non-exclusive, fully paid and royalty-free, worldwide, limited license to use, modify, delete from, add to, publicly perform, publicly display, reproduce and translate such Content, including without limitation distributing part or all of the Site in any media formats through any media channels, except Content not shared publicly ("private") will not be distributed outside the Instagram Services.

Although the language claims to be a “limited” license, there is nothing limited about it:

  • It grants Instagram every right a copyright owner has the ability to authorize under the Copyright Act.
  • The license grant is not restricted to uses necessary to operate the site, promote the site or even related to the site. With the exception of private content, the content posted to Instagram is licensed to Instagram for any use – even uses wholly unrelated to the site. Instagram underscores this point by making clear that only private content will not be distributed outside the Instagram Services.
  • This overreaching license is coupled with a further requirement that the user agree that the works may be paired with advertising without any notice to the user.  This is essentially the same issue users were concerned about in the proposed new terms of use:

“Instagram may place such advertising and promotions on the Instagram Services or on, about, or in conjunction with your Content. The manner, mode and extent of such advertising and promotions are subject to change without specific notice to you.”

So, by returning to the current terms of use, Instagram has done little if anything to remedy the problem users expressed dismay about.

Warranty and Indemnity the User Can’t Control

Although many users were up in arms about the possible commercialization of their works by Instagram without their consent, most users seemed concerned primarily about Instagram unjustly enriching itself by exploiting their work, but did not consider that the terms of use they had agreed to by posting work to the site made them liable for royalties, fees and other money that may be owed to individuals or companies as a result of Instagram’s commercialization of the images.   This is because both the old and the new licenses require the user to warrant, among other things that:

“ the posting and use of your Content on or through the Instagram Services does not violate the privacy rights, publicity rights, copyrights, contract rights, intellectual property rights or any other rights of any person.” (emphasis added)

The terms of service also include an indemnity that obligates the user to cover “all royalties, fees, and any other monies owed by reason of Content you post on or through the Service.” 

Since Instagram has such a broad right to modify the service as it wishes, including by commercializing a user’s photographs, it is easy to imagine that a photo posted for purely personal and non-commercial reasons, could ultimately end up resulting in a liability to the user should Instagram choose to commercialize it or use it in an unanticipated fashion. 

These issues should be of as much concern to Instagram as they are to users of the service.  And not just to maintain good consumer relations.  While some may argue that a contract like this represents tough lawyering on the part of a corporate entity, which will give Instagram ultimate flexibility in how it runs and develops its business, I think quite to the contrary.  The terms are so extreme and so one-sided, and the agreement is presented as a “take it or leave it” offer to users without the advice of counsel, that it is entirely possible courts or arbitrators would find the contract unenforceable.  Since Instagram will never realistically be able to assert claims this extreme in any event, it should rethink the terms of service and seek the licenses and the remedies it actually needs to run its business and serve its customers.  An extreme contract in this case, is essentially no contract.