In a proposed class action lawsuit filed in San Francisco federal court recently, a California Instagram user leveled breach of contract and other claims against the company.  Instagram, which allows people to add filters and effects to photos and share them easily on the Internet, was acquired by Facebook last 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. Read more…

U.S. District Judge Richard Seeborg in California rejected a settlement in August over Facebook’s ‘Sponsored Stories’ advertising feature, questioning why it did not award money to Facebook users for using their personal information.

But in a ruling handed down Monday, Seeborg said a revised settlement “falls within the range of possible approval as fair, reasonable and adequate.”  Read more…

Facebook, Inc. has proposed a revised $20 million settlement in a class action lawsuit accusing it of violating the rights of users through its “Sponsored Stories” advertising feature after a U.S. judge rejected an earlier accord.

The new settlement agreement, filed in early October, in U.S. District Court in San Francisco, drops provisions setting aside up to $10 million to be given to charity and allows users to apply for a cash payment of up to $10 each. Read more…

A settlement in a recent Facebook class action lawsuit means users will soon have the option to back out of ads that show their pictures and name next to “sponsored” advertisements on the social networking pages of their friends. The decision comes after users claimed Facebook was using their images without first obtaining proper permission.

Under the new rules, analysts believe Facebook is set to lose upwards of $100 million in lost revenue. Read more…

On May 28, 2012, seven additional securities fraud class actions were filed against Facebook.  The cases were filed in New York and in California.

The complaints allege that only large institutional investors were informed of reduced revenue estimates during the roadshow.  The Facebook IPO went public on May 18, 2012 at $38 per share, and only a few minutes later reached a high of $45 per share.  The complaints allege that on May 22, 2012, as reports of the materially lowered revenue estimates filtered out to the public through Reuters and other media outlets, the price of Facebook shares declined to close at only $31 per share. Read more…