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Slideshow Sponsored Links Instagram furor triggers first class action lawsuit Tweet Share this Email Print Related News Instagram retreats on some service terms after backlash Fri, Dec 21 2012 Instagram tests new limits in user privacy Wed, Dec 19 2012 Instagram says no plans to put user photos in ads Tue, Dec 18 2012 In brewing rivalry, Instagram trims ties to Twitter Wed, Dec 5 2012 Student group takes Facebook privacy gripes to court Tue, Dec 4 2012 Analysis & Opinion Counterparites: 2012 — The year of bank fraud Instagram unleashes a thousand words Related Topics Investing Simplified » Tech » Media » Facebook » A photo illustration shows the applications Facebook and Instagram on the screen of an iPhone in Zagreb April 9, 2012. Credit: Reuters/Antonio Bronic By Dan Levine SAN FRANCISCO | Mon Dec 24, 2012 2:45pm EST SAN FRANCISCO (Reuters) - Facebook's Instagram photo sharing service has been hit with what appears to be the first civil lawsuit to result from changed service terms that prompted howls of protest last week. In a proposed class action lawsuit filed in San Francisco federal court on Friday, a California Instagram user leveled breach of contract and other claims against the company. "We believe this complaint is without merit and we will fight it vigorously," Facebook spokesman Andrew Noyes said in an e-mail. Instagram, which allows people to add filters and effects to photos and share them easily on the Internet, was acquired by Facebook earlier this year for $715 million. In announcing revised terms of service last week, Instagram spurred suspicions that it would sell user photos without compensation. It also announced a mandatory arbitration clause, forcing users to waive their rights to participate in a class action lawsuit except under very limited circumstances. The current terms of service, in effect through mid-January, contain no such liability shield. The backlash prompted Instagram founder and CEO Kevin Systrom to retreat partially a few days later, deleting language about displaying photos without compensation. However, Instagram kept language that gave it the ability to place ads in conjunction with user content, and saying "that we may not always identify paid services, sponsored content, or commercial communications as such." It also kept the mandatory arbitration clause. The lawsuit, filed by San Diego-based law firm Finkelstein & Krinsk, says customers who do not agree with Instagram's terms can cancel their profile but then forfeit rights to photos they had previously shared on the service. "In short, Instagram declares that 'possession is nine-tenths of the law and if you don't like it, you can't stop us,'" the lawsuit says. Kurt Opsahl, a senior staff attorney with the Electronic Frontier Foundation who had criticized Instagram, said he was pleased that the company rolled back some of the advertising terms and agreed to better explain their plans in the future. However, he said the new terms no longer contain language which had explicitly promised that private photos would remain private. Facebook had engendered criticism in the past, Opsahl said, for changing settings so that the ability to keep some information private was no longer available. "Hopefully, Instagram will learn from that experience and refrain from removing privacy settings," Opsahl said. The civil lawsuit in U.S. District Court, Northern District of California, is Lucy Funes, individually and on behalf of all others similarly situated vs. Instagram Inc., 12-cv-6482. 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