Growing Concerns Over Online Privacy Lead to Class Action Lawsuits Against Instagram, Facebook and Google

Davis LLP Privacy Law Bulletin


In addition to email, social networking websites (such as Facebook, MySpace, Google+, Twitter, and LinkedIn) have become the established norm for communication and maintaining relationships. While these websites are useful tools for exchanging information, many users are concerned that their personal details are being circulated far more widely than they would like. The growing concerns over privacy breaches have resulted in a number of class action lawsuits. This article will review the class action lawsuits relating to privacy against Instagram, Facebook, and Google.

Instagram

Instagram is a mobile photo sharing app which allows people to add filters and effects to photos and share them easily on the Internet. Instagram was acquired by Facebook in 2012.

On December 17, 2012, Instagram announced several changes to its Terms of Service. In summary, the new Terms of Service suggested Instagram would be allowed to use pictures in advertisements without notifying or compensating users, and to disclose user data to Facebook and to advertisers. Instagram also proposed that the parents of minors implicitly consent to the use of their childrens' images for advertising purposes. The new Terms of Service also introduced a mandatory arbitration clause which would force users to waive their rights to file a class action lawsuit in most circumstances. The changes were to take effect on January 16, 2013 and would not apply to pictures uploaded before that date.

Many users expressed outrage. As a result, a few days later, Instagram again revised the Terms of Service announcing that it would withdraw some of the proposed changes. Instagram backed off a plan to use the names, images, and photos of users for advertising purposes by deleting language about displaying photos without compensation. However, Instagram kept language that gave it the ability to place ads in conjunction with user content, saying "we may not always identify paid services, sponsored content, or commercial communications as such”. It also kept the mandatory arbitration clause.

A class action lawsuit was filed in the U.S. District Court for the Northern District of California on December 21, 2012 which accused Instagram of violating the property rights of its users and breaching its existing terms of service. The class action lawsuit seeks to preserve valuable and important property, statutory, and legal rights, through injunctive, declaratory and equitable relief before such claims are forever barred by adoption of Instagram’s New Terms. The lawsuit takes particular issue with Instagram’s ownership of user images, especially in the situation where a user quits the service and, according to Instagram’s Terms of Service, loses ownership of their photos to the company.

On February 13, 2013, Instagram asked the federal court to dismiss the class action lawsuit filed over changes to Instagram’s Terms of Service. Instagram argued that the plaintiff, Lucy Funes, had no right to bring her claim because she could have deleted her Instagram account before the changes in the Terms of Service went into effect on January 19, 2013. According to Instagram's filing, Ms. Funes filed the lawsuit on December 21, nearly a month before the changes in the Terms of Service went into effect and she continued to use her account after that day. Instagram also disputed Funes' claims that the new terms required her to transfer rights in her photos to the company. Furthermore, Instagram took the position that both the old service terms and the new terms "emphasize that the individual owns the content he/she posts through Instagram's service".

Facebook

In April 2011, a class action lawsuit was filed against Facebook in the USA (in British Columbia, a similar class action was filed in March 2012) after some users expressed outrage that Facebook was using people’s information and photographs without permission to display sponsored stories. The lawsuits argue that Facebook’s sponsored stories allow brands to use the photos and names of people who have “liked” their brand in their advertisements on the social network. The lawsuit took the position that the sponsored stories were a part of Facebook’s business model, and wrongly turned interaction on the website, such as people “checking in” at a brand outlet, commenting on a product or liking a service, into advertisements by republishing this information in the main news feed.

At the time of the USA lawsuit, Facebook took the position that it was reviewing the situation and continued to believe that the class action suit was without merit. Facebook also used the USA First Amendment as a defence to its practice. Facebook stated that when people click the ‘like’ button on a brand’s Facebook page; this could be taken as those people effectively giving their consent for their name (and presumably their photograph) to be allied to that company and to endorsing the company in a sponsored story or advertisement.

The USA lawsuit was the first one of its kind to have made any progress in the courts. As a result, Facebook announced to its users that it is willing to pay out $20m to settle the class action lawsuit. The offer is one of a number of attempts by Facebook to settle the lawsuit (which remains pending). The British Columbia lawsuit also remains pending.

In the early part of 2013, Facebook emailed its USA members to tell them that they may be eligible for a share of the funds if their names, profile pictures or photographs were used in one of the sponsored stories. Emails to USA members started going out at the end of January 2013.

However, Facebook’s users may not see any of the cash even if they are eligible. If the number of claims makes it "economically infeasible" to pay everyone cash, Facebook proposes to channel most of that settlement cash to non-for-profit Internet privacy advocacy groups. Those who received the settlement notice have until May 2, 2013, to decide if they want to submit a claim. A final hearing on the USA case is slated to take place in June 2013.

The certification hearing for the British Columbia class action is also scheduled for June 2013.

Google

In October 2012, Wayne Plimmer of Sechelt, British Columbia filed a class action suit against Google, claiming that Google is illegally spying on the incoming mail of their webmail users.

It alleges that Google’s Gmail service “intercepts, obtains and uses personal information it collects from emails sent to Gmail users”. Gmail users can only use the service if they consent to Google’s terms of service, which explicitly allow the company’s algorithms to scan email in order to present targeted ads. The lawsuit claims breaches of sections 1 and 3 of the British Columbia Privacy Act R.S.B.C. 1996 c. 373 and s.52 of the Federal Competition Act R.S.C. 1985 c. C-34. The lawsuit also alleges that Google “infringes on the email senders’ copyright, as well as solicitor-client, physician-patient, priest-penitent and journalist-source privileges”.

This case parallels many of the aspects of the three cases filed in July 2012 in California, against Google & Yahoo!. However, the BC lawsuit differs in that the plaintiff is not a Gmail user, which could render some of his arguments moot. Instead, the plaintiff argues that Google is invading his privacy by scanning and using data in emails he sends to Gmail users.

The BC lawsuit is launched on behalf of “all persons in the province of British Columbia who have sent email to a Gmail account”, and asks for an injunction that would stop Google from intercepting any emails sent from British Columbia, as well as claiming statutory damages for breach of copyright of $500 per email. The suit also states that Google should be required to delete any and all emails sent by members of the class action lawsuit. At this time the class action has yet to be certified.

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