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What Will a Billion Dollars Buy Facebook?

Want to understand what the Facebook deal really means for Instagram users? The answer, as always, lies in the small print of the Terms of Service.

by Lionel Maurel (Calimaq) On April 13, 2012

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The purchase of Instagram by Facebook for a billion dollars has created a wave of panic among users of the photo sharing service. The reason: Facebook’s infamous reputation when it comes to handling users’ personal data.

Many users now find themselves with questions about who will own their content, or the fate of their personal data. Some have even decided to close their Instagram accounts, retrieving their photographs and migrating them to other services.

Others have chosen to stay put, but are demonstrating their objection to the deal by launching a protest on the Instagram platform itself. Thousands of users have posted black pictures, accompanied by the hashtag #Instablack.

A comment left on the US Digital Photography School forum expresses many users current thinking.

If Facebook owns Instagram, and Instagram owns the photos, then Facebook owns the photos.

It is, of course, important to be vigilant when deals of such magnitude take place between giants of the Internet, but users sometimes tend to descend into paranoia when Facebook is involved. For a clearer view on things, here are eight aspects of the likely legal implications of the purchase of Instagram by Facebook.

Consequences of the deal

A priori there are none. But if there are to be consequences, the Instagram terms of service (ToS) will be where the action plays out. Some have speculated that Facebook could impose its own ToS for Instagram content, but this is unlikely, at least for the moment.

In the statement posted on Facebook to announce the deal, Mark Zuckerberg indicated that Instagram will remain a separate service to Facebook, retaining its own individuality. For the moment then, both sites will continue to be governed by their respective ToS.

Differences between the ToS

Yes, there is a real difference between these two contracts. The ToS of Instagram make relatively fewer demands over user content than Facebook’s do. In their section on intellectual property issues, Instagram’s conditions state:

Instagram does NOT claim ANY ownership rights in the text, files, images, photos, video, sounds, musical works, works of authorship, applications, or any other materials (collectively, “Content”) that you post on or through the Instagram Services. 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.

Instagram says it does not claim any ownership over the content of its users, but many social media platforms make the same claim (including Facebook), without it being a genuine guarantee. The real indicator is the scope of the license and the type of rights that users grant to the platform. These include whether the service grants itself more rights than it needs to simply function.

The license required by Instagram, although relatively lengthy, does not include certain elements found in other services, such as the right to sell content to third parties or to “sublicense” it.

This is the case with other mobile photo sharing services like Twitpic, whose use of this type of clause to resell its content, on an exclusive basis, to a news agency was reported on last year. Its ToS specified:

(…) by submitting Content to Twitpic, you hereby grant Twitpic a worldwide, non-exclusive, royalty-free, sublicenseable and transferable license to use, reproduce, distribute, prepare derivative works of, display, and perform the Content in connection with the Service and Twitpic’s (and its successors’ and affiliates’) busines (…)

Other services, such as Yfrog or Mobypicture, are less voracious in terms of rights, but to date Instagram has found a good balance.

Facebook, meanwhile, uses a special license, about which a lot of ink has already been spilled.

(…) 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 (IP License). 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.

This clause does mention the possibility of sublicensing, potentially leaving the door open to future abuses. Moreover, while the user can choose to retrieve their content, the license does not expire if that content was shared. But the majority of content is shared with other users on Facebook, making the license quasi-perpetual. This is not the case on Instagram, whose license is not “irrevocable”.

Getting owned by Facebook

Facebook can not become the owner of the photographic resources of Instagram. This is simply because Instagram can not sell to Facebook what it does not own itself. As mentioned above, Instagram does not claim any real right of propriety over the content generated by its users.

Its license only grants it a right of usage which, while relatively broad, is generally limited to what is needed to run the service (to post the photos and allow them to be sent around various connected social networks). By acquiring Instagram, Facebook has acquired the rights conferred by this license. Instagram users will remain Instagram users.

Even if Instagram wanted to offer ownership rights of the shared photos to Facebook, Zuckerberg’s service could not become the owner directly, since the Instagram’s license is neither transferable nor sublicensable.

All this provides some certainty for users of Instagram. And ultimately they’ll want to be protected from themselves, as we’ll see now!

Sharing

While Instagram and Facebook constitute two relatively water-tight entities from a legal perspective (even after the takeover), that’s not the case from a technical point of view. With one click, it’s possible to ship photos posted to Instagram on to Facebook, Twitter, Google + and many other social media networks.

This ability is one of the application’s flagship features, and it’s likely that many users have shared their photos on other platforms in this way, starting with Facebook.

But in doing so, they have “submitted” their content to these tertiary sites, in the sense usually indicated by their ToS, which immediately activates those conditions. This means, for example, that by sharing a photo taken with Instagram on Facebook, users have voluntarily submitted their content to Facebook’s ToS, which as we have seen are more proprietary than those of Instagram. The same is true for Twitter or Google +, whose ToS require a lengthy license, transferable and sublicensable.

There is something quite ironic, then, about Instagram users balking at the sale of the service to Facebook, when many of them have no doubt already transferred their content to the Palo Alto firm, or other platforms that are no less greedy from a legal point of view!

Privacy

The Privacy section of Instagram’s ToS again aims to be relatively reassuring when it comes to protection of personal data:

Instagram will not rent or sell potentially personally-identifying and personally-identifying information to anyone.

While the Facebook deal can not result in the sale of Instagram users’ personal data, again it’s likely that users have already voluntarily given Facebook access to their personal information, by connecting their Instagram accounts to Facebook and other social media networks.

Some commentators have suggested that one reason for the purchase of Instagram by Facebook lies in the interest the photographs have for marketers, being indications of the tastes and inclinations of users.

This argument would hold true if Facebook could transfer data from Instagram and cross-reference it with their own. But apart from the (admittedly frequent) cases where users share their photos on its platform, Facebook can not engage in cross-referencing of this type. This type of treatment of personal data is already highly regulated and closely observed.

For comparison, let’s take the example of YouTube, acquired by Google in 2006. Following the consolidation of both sets of terms of service, Google granted itself the right to cross-reference information from YouTube with information collected from its other services. The move triggered outcry and an angry reaction from privacy advocates.

Deleting your Instagram account

Several websites have recommended taking this step. There are many applications that can use the API provided by Instagram to easily retrieve posted content. As noted earlier, Instagram’s license over the content is not “irrevocable”, unlike other platforms, and it would therefore end when the contents are no longer “subject” to Instagram.

However, it should be noted that for legal reasons Instagram reserves the right to retain certain content even after it has been deleted by the user. It does not have to inform users of this, nor allow them access to the retained content.

Deleted content may be stored by Instagram in order to comply with certain legal obligations and is not retrievable without a valid court order.

Migrating

Again, this action is recommended by several websites, who have presented alternative applications for applying filters to photographs and sharing them on social networks from your mobile.

But if you choose this option, be careful you’re not migrating out of the frying pan and into the fire, as it were. The sites recommending migration more often than not assess these alternative applications only from a technical standpoint, without considering their terms of service, which can be much worse than those of Instagram.

LifeHacker, for example, suggest using applications such as PicPlz, PicYou, Hipstamatic, EyeEm, Camera + or Camera Awesome instead of Instagram.

But on reading the ToS of these applications, one discovers that only PicYou and EyeEm protect the rights of their users (more so than Instagram itself, as they demand no license over any content posted). In contrast, the other four services have ToS that are just as aggressive as Facebook’s…

Modification of the Terms of Service

This is without question the major risk, although no doubt Facebook will wait a little while before embarking on such a sensitive operation. The conditions of Instagram leave the door ajar to a unilateral change, that users will be deemed to implicitly accept. Instagram’s sole obligation will be to inform users by email if the changes are deemed substantial.

We reserve the right to alter these Terms of Use at any time. If the alterations constitute a material change to the Terms of Use, we will notify you via Internet mail according to the preference expressed on your account. What constitutes a “material change” will be determined at our sole discretion, in good faith and using common sense and reasonable judgement.

It’s worth noting the example of FriendFeed, another leading service in its time, which was bought by Facebook in 2009. Their ToS have not changed substantially, despite them being relatively liberal to begin with.

So the panic that has gripped many Instagram users may not be justified from a legal perspective. The value of a platform such as Instagram is that the content that it houses and helps to get out there is “legally clean”: users are the authors of these photos and generally have the right to post them.

This situation is very different from that of a Pinterest, another emerging Facebook rival. Pinterest encourages its users to share content found on the web and over which they have no rights, something which is becoming a real problem for the platform.

Social media often behave like “parasites”, living off content produced elsewhere. But in the battle between the giants of the web, one thing is certain:  he who can drink from the legally purest source has a clear advantage over his competitors.


Image Credits: beta75.se CC-BY, Instagram user

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