What follows is a cautionary tale, reminding users that it might be wise to read the terms presented on your computer screen before clicking “I Agree”.

Instagram, Twitter, Pinterest and Facebook. All 4 are some of the world’s largest social media services. These services, and others like them have been gaining more and more traction as the number of internet users increases worldwide. However, as Instagram users found out last month, users might be unwittingly allowing these services to use not only the information they post but the content they share using these services. In December, Instagram proposed changes to their Terms of Use policy that seemed to give Instagram the ability to use and sell users’ posted content and information without additional compensation to the user in question.

Once this became widespread knowledge online, the outcry from users was almost unanimous. In an attempt to mitigate the public relations backlash, Kevin Systrom – co-founder of Instagram – posted on the site attempting to clarify what the new terms meant and stating that the particularly offending terms would be removed when the new Terms of Service and Privacy Policy document came into effect on January 19^th, 2013.

A news story such as this brings to the forefront a number of issues that have economic, legal, technological, and privacy-related implications. An in-depth discussion on these topics would provide enough material for a term paper (or two), so the following will be a brief outline on the major discussion points that law makers, service providers, and users should keep in mind as they move into the future.

The first consideration is that consumer contracts, such as the Terms of Service (also seen in forms such as the End User Licence Agreement), have been held as valid contracts by the US and Canadian courts in such cases as ProCD v Zeidenberg and North American Systemshops Ltd v King. These cases dealt with shrink-wrap licensing – a practice used by a number of software manufacturers in the past in which a person opening the product packaging would be found to have agreed to the terms of use contained therein. While most social networking sites such as Instagram have users agreeing to terms by the use of click-wrap licensing (users agree to the terms by clicking “I Agree”), the same principles apply and courts have found these consumer contracts equally valid in most circumstances.

While consumer contracts like Terms of Use and End User Licence Agreements are ubiquitous in the digital age, how many people actually read and understand them before accepting is an interesting question. Typically, creation of a contract requires a “meeting of the minds”. In the context of these types of contracts, having the opportunity to understand the terms but failing to do so will still result in a valid, binding contract if the terms are agreed to. While this hardly seems to be the “meeting of the minds” that is normally required, taking this approach allows for efficient contracting between the public and corporations. Some could argue that the beneficial economic reasons for finding these agreements enforceable validates the approach and that individuals must take responsibility for the agreements to which they agree. However, the reality is that the majority of the public accepting these contracts would not understand the terms even if they took the time to read them (an action that is unlikely to happen in the first place). Many that click “I Agree” are crossing fingers with the other hand and hoping for the best.

In a way, this approach to contracting relates to the privacy issues that these types of social media services represent to the public. Many of these services are free and for many of them, the way they obtain revenue is through the information its users provide.  Facebook has a page detailing how it can use your information – for example, the service can use your personal information to determine age-appropriate or interest-directed advertising. While some may be ok with this kind of a use, there are many that worry of the implications it has on their personal information. What if it is sold to companies that abuse it? What if it is stored in an unsecured manner and accessed by hackers (as happened to a number of Sony Online Entertainment users just a few years ago)? More importantly, if users are given a click-wrap licence that sign away their rights to privacy without exceptional notice to what the information they provide can be used for, we can begin to see why some may not agree that the current system is workable.

If nothing else, stories like these should show the general populace that it is important to read and understand the terms that computer software programs and online services offer to you, and as the age-old saying goes: if it’s free, it’s probably too good to be true.

Adam is a JD Candidate at Osgoode Hall Law School.

Posted in Contracts, Identity Theft, Internet, Privacy, Technology