Instagram's privacy backlash, and the dirty secret of data caps

The Instagram logo is displayed on an Apple iPhone on December 18, 2012 in Fairfax, Calif. Users of the popular photo-sharing app Instagram are angered over language in Instagram's new terms of service that states that a business may use any of the users photographs in advertising without compensation to the user.

Image of Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age
Author: Susan Crawford
Publisher: Yale University Press (2013)
Binding: Hardcover, 368 pages

The net this week is awash with complaints about privacy and Instagram. That's the photo-sharing application Facebook bought this year for about a billion dollars. A new Instagram policy is set to take effect within weeks that seemed to give the company the legal right to use your photos in advertising. Even though the company says it has no plans to actually use pictures this way, the policy change is angering some users.

"The new policy says that Instagram, that is Facebook, now has the perpetual right to sell users photographs without paying them or even notifying them," says Declan McCullagh, a senior writer at CNET. He believes the move threatens the goodwill Instagram built up with its 100 million users.

"I don’t think it’s quite as dramatic as everyone, including myself, has made it seem like on Twitter but it almost doesn’t matter because they really shook the foundation of their user base," says Documentary photographer Theron Humphrey, who has 150 thousand Instagram followers, has been one of those loyal users. "It just wasn't respectful."

Humphrey is thinking about canceling his account. In a statement posted on the official blog, Instagram says it's listening to the criticism and, quote: "To be clear: it is not our intention to sell your photos. We are working on updated language ... to make sure this is clear."


Paying for Internet via cell phone is often like packing for an international flight: you want to fill that suitcase with as much as you can, but you don't want to cross the weight limit because it will cost you. That's how it is with caps on Internet data plans: it's expensive if cross the limit.

"They’d say, look, it’s extremely expensive to build the hardware, lay down the wires, dig up the dirt required to provide high speed Internet access to Americans," says Susan Crawford, a Visiting Professor at Harvard Law School who argues the phone companies say they have caps so they can pay back all the money they pour into building the net. "We can only do that if we have enough money coming in to fund our operations."

Another big argument is that surcharges help keep data hogs from clogging the Internet with their gluttony.

But a report from the non-partisan think tank the New America Foundation finds caps hard to defend in part because they don't help with moment to moment congestion on the internet. Plus, the report find the caps stayed pretty constant even as the cost of delivering Internet data was falling sharply.

"These caps are really a way for the companies that implement them to increase their revenues," says Nate Anderson, deputy editor at the publication Ars Technica who has been following this. "And they have very little to do with addressing network congestion, which is the reason always given to support them."

Crawford says it's not just about what consumers pay. There is also concern that data caps hold back advances: Some interesting new online services that might use lots of data may not have a chance if too many people are worried about caps.

"Americans are paying more for worse service than many developed countries around the world," says Crawford, who is also author of a new book about the power of the telecom industry called "Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded age."

In South Korea, they’re going to get a gigabyte of symmetrical fiber to the home access, that means equal uploads and downloads, that makes possible cloud computing, all these new uses of these networks, and that’s a really important part of the story. Because this isn’t just about consumers paying more, it’s also about dampening innovation."

About the author

David Brancaccio is the host of Marketplace Morning Report. Follow David on Twitter @DavidBrancaccio
Image of Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age
Author: Susan Crawford
Publisher: Yale University Press (2013)
Binding: Hardcover, 368 pages

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