Instagram’s Insta-fail: 3 Tips for Avoiding a Terms of Service Nightmare

Instagram’s gift to software companies this holiday season was a lesson in exactly how NOT to handle privacy policy and terms of service updates. Here are three tips for getting it right.

In the SaaS or software legal community, there’s a growing trend toward plain English drafting of terms of service agreements, privacy policies, etc. that urges attorneys and in-house counsel to write these documents in a clear and simple manner. Unfortunately, it seems that Instagram’s legal department missed the memo.

A Little Background on Instagram’s Problem

After releasing a new privacy policy and terms of service last week that was full of confusing and seemingly overreaching legalese, the photo sharing network experienced the kind of user backlash that technology companies (or any company, for that matter) dread. Less than 24 hours after releasing those documents, the hashtag “#boycottinstagram” was trending on Twitter, and an article on Mashable with the headline “Instagram Will Basically Sell Your Life Away” had been shared nearly 12,000 times. And to top it all off, Instagram is now facing a class action lawsuit that was filed by its users (and that won’t be much fun to deal with).

Instagram – or any SaaS or software company – should know better than that. After all, if technology users are nothing else, they are extremely sensitive to data security, privacy exposure, and being taken advantage of. And yea, they read your agreements and policies.

How to Avoid Terms of Service Outrage

The unfortunate truth for Instagram is that this fiasco could have been easily avoided if the company, its attorneys, and its executive team had followed these 3 simple tips for drafting legal documents:

1. Write in Plain English: While lawyers might be drafting your terms of service or privacy policy, it’s important to tell them to write them in a way that the user or customer will understand (without needing an attorney to translate or interpret). Keep your documents simple, short, and to the point. Write them with the reader in mind, and not the drafter.
2. Explain any Changes: Technology customers are very savvy, and they don’t like feeling like wool is being pulled over their eyes. The more open and honest you are about any changes to your terms of service or privacy policy, the more likely it is they’ll be receptive to them.
3. Your Executive Team Should Take Ownership of These Documents: All too often, a company’s attorneys will publish their customer facing legal documents without the right business stakeholder reviewing them. That’s a huge mistake! Your customer facing legal documents are too important to leave them only to the lawyers. It’s the management team’s responsibility to make sure that those documents are communicated correctly, clearly, and simply (and are 100% consistent with your model).

3 “Better” Examples of Plain English Agreements

In reality, Instagram will probably recover from this. However, that doesn’t mean you have to learn the hard way (which apparently was the Instagram way). Why not follow in the footsteps of businesses that have already figured this out, and model your company after those businesses instead?

Here are three companies that have clearly figured out plain English agreements:

• Google: Despite the complexity of its business and its wide range of offerings, Google’s terms of service are surprisingly simple. The search giant doesn’t hide them, and its terms are very easy to digest. This does not happen by mistake, as it is part of their business strategy (notice I said business strategy, not legal strategy).

• LinkedIn: The professional networking site’s user agreement begins by explicitly laying out its purpose, scope, and intent, and follows with several subheads that very clearly state the company’s (and its users’) rights and obligations. When they change their user agreement, they even summarize the changes (take a look at the link on the top right of their user agreement).

• IBM: With its “Agreement for Exchange of Confidential Information,” IBM has produced the gold standard that every other tech company is held to (if you think about it, they have been contracting for complex IT longer than anyone). Rather than being composed of cumbersome paragraphs, the agreement has subheadings with simple summaries and brief bulleted lists (plus lots of white space). While it’s more difficult for attorneys to write like this, it makes reading the agreement far easier for the user (and should even make the agreement more enforceable in a court).

The biggest lesson that these three companies can teach us is that “plain English” rules in the SaaS and software world and is here to stay. Information technology is already complex by nature, and using typical legalese simply causes more confusion and friction than is necessary (or warranted).

SaaS and software companies must begin writing their terms of service, privacy policy, and user agreements with their readers in mind. Otherwise, they might find themselves fighting fires that don’t flame out until significant damage has already been done (and too many lawyers have been unnecessarily enriched along the way).